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US retail sales jump as Delta shifts spending back to goods

A customer uses a credit card terminal to complete a purchase at a WalMart store in Burbank, Calif.
A customer uses a credit card terminal to complete a purchase at a WalMart store in Burbank, Calif.Patrick T. Fallon/Bloomberg

(Bloomberg) -- US retail sales unexpectedly increased in September, reflecting a broad-based improvement, suggesting that demand for merchandise remained robust in the month.

The value of overall retail purchases increased 0.7 percent last month following an upwardly revised 0.9 percent increase in August, Commerce Department figures showed Friday. Excluding autos, sales increased 0.8 percent in September.

The median estimate in a Bloomberg survey of economists called for a 0.2 percent decline in overall sales and a 0.5 percent advance excluding autos.

Coronavirus infections increased in August and September, curbing demand for services such as travel and entertainment and leading Americans to shift their spending toward goods. Higher spending on merchandise is likely to add more pressure to global supply chains, which have struggled to keep up with accelerating demand.

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The figures cap a quarter in which consumer spending probably slowed, due in part to the delta variant and supply-chain constraints. Economists currently forecast spending to grow at an annualized 2.2 percent pace in the three months through September, a massive slowdown from 12 percent in the second quarter.

The retail sales data showed receipts at restaurants and bars, the only services-spending category in the report, rose 0.3 percent in September after a 0.2 percent increase in the prior month.

Motor vehicle and parts dealer sales rose 0.5 percent in September after a 3.3 percent decline a month earlier, which reflected supply chain constraints that have limited supply and pushed prices upward.

Eleven of 13 retail categories posted increases last month. Receipts at sporting goods and hobby stores rose 3.7 percent and general merchandise stores increased 2 percent.

Consumers have been experiencing higher prices across an array of spending categories in recent months as businesses pass along higher materials, shipping and labor costs. The degree to which inflation played a role in the retail sales data is not clear as the figures are not adjusted for price changes.

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