The spending outlook for consumer goods remains weak heading into the holidays as September retail sales posted a third straight month of below-trend growth.
September growth was weak on a year-to-year basis across most retail channels, although several home-related sectors improved on a month-to-month basis from a weak August.
The overall weakness is consistent with the depressed election environment suggested by Spending Confidence (see prior post here) and the conditions underlying MacroSavvy’s weak holiday forecast (found here).
Home improvement, drug stores, eating out, and online-nonstore are the only places where spending remains strong on a year-to-year basis, according to a first look at the latest U.S. retail numbers:
In September, seasonally adjusted sales excluding autos, food service, and fuel kept to a weak 2.9% growth pace. This measure excludes gasoline and fuel dealers. This was the third straight month of growth of about 3% or less—down from growth of 3.7% year-to-date and 3.9% last year.- Big-box mass stores remain the focus of the weakness. A month-to-month decline put this channel down 2.5% from a year ago. Year-to-date declines are now approaching -1%.
- Grocery stores edged higher month-to-month, but remain up by less than 2% year-to-year as falling food prices weigh on sales gains (see more about prices here).
- Online and other nonstore retailers (+10.6%) continue to lead all sectors, but even that growth is off the mid-summer pace of 12% to 13%. (Other nonstore includes catalogs and TV home shopping.).
- Home improvement stores led a month-to-month pickup among home-related channels, but is the only one sustaining strong year-to-year gains (+5.6%).
- Clothing stores were flat month-to-month and remain nearly flat year-to-date.
See the table summary for more detail.
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