Retail sales in the United States made a much bigger improvement than expected, last month, mostly boosted by new auto purchases, with building supply sales also helping shore up a rather complicated time for the retail industry as a whole. Analysts are saying this is a good sign that the US economy is strong, in spite of global fears of a massive economic slowdown.
According to the United States Department of Commerce, retail sales grew by 0.4 percent, last month, which is, essentially, double what analysts had expected. Again, the data suggests that blowout came from increased sales of things like automobiles and clothing. At the same time, retail data for August has been revised up, slightly, to show that retail sales are up 0.8 percent (instead of the 0.7 percent that had been previously reported).
Specifically, the new data says that vehicle spending—and new vehicles, specifically—jumped 1.8 percent. Online sales, as a whole, are also on the rise, climbing 1.6 percent in the eighth month of the year. By comparison, this is the same rate by which online sales jumped in July, during Amazon’s two-day blowout Prime Day sale. But even without automobiles, gasoline, and building materials, retail sale growth climbed on 0.3 percent last month, down from a revised 0.9 percent (in July).
This Commerce Department report could continue to support concerns within the financial market of the looming recession. However, the Federal Reserve is now expecting another interest rate cut, perhaps coming on Wednesday next week. The hope is that this move might absorb some of the trauma created by trade tensions coming out of the longest period of economic expansion in US history.
Indeed, Federal Reserve Chairman Jerome Powell said, last week, he does not foresee a recession should hit but the US central bank will continue to act “as appropriate” with the explicit goal of maintaining the existing expansion. And, for the record, we are now in the 11thyear of this expansion. Concurrently, retail sales have been on the rise, as well: increasing for six straight months—its longest stretch of gains since June of 2017—with retail sales up more than 4 percent since the same time last year.