Title: US Retail Sales Surpass Expectations, Led by Strong September Growth
Date: October 17, 2023
Author: Josh Schafer
Publisher: Yahoo Finance
The US retail sector has continued to defy expectations, as new data released by the Commerce Department on Monday revealed a significant increase in September retail sales. The report showed a 0.7% rise in sales from the previous month, surpassing Wall Street’s forecasted growth of 0.3%. Furthermore, sales excluding auto and gas increased by 0.6%, well above the estimated 0.1% increase compiled by Bloomberg. In a positive revision, August’s sales were also adjusted upwards to 0.8% from a previously reported 0.6% increase.
Of the 13 categories highlighted in the report, nine saw increases from the previous month. Miscellaneous store retailers experienced the highest growth rate, with sales shooting up by 3% from August. Nonstore retailers also performed well, with sales increasing by 1.1%. Sales in the motor vehicle and parts dealers category also saw a significant rise, increasing by 1% from September.
However, not all categories experienced growth in sales. Electronics & appliance stores as well as clothing sales both dropped by 0.8% compared to the previous month.
The surprising strength in consumer spending comes amidst the Federal Reserve’s efforts to cool inflation through interest rate hikes. Despite this, recent economic data has consistently outperformed expectations, indicating a healthy consumer sector.
In other news, Bank of America Corporation (BAC) reported a 10% rise in profits, driven by higher interest income and strong performance from its Wall Street unit. This news led to a 1% premarket rise in Bank of America stock. On the contrary, shares of Lockheed Martin (LMT) fell by over 1% in premarket trading following its higher third-quarter revenue report. Ericsson (ERIC) also experienced a drop of over 4% after reporting downbeat earnings.
Looking ahead, investors are keeping a close eye on the ongoing Israel-Hamas conflict and its potential impact on the global economy. President Joe Biden’s planned visit to Israel and Jordan has eased some worries, signaling a possible solution to the escalating tensions.
The oil market remained steady as the US intensified diplomatic efforts and expectations grew regarding the easing of sanctions on Venezuelan oil producers. Crude oil futures held above $86 a barrel, while Brent crude futures traded around $90 a barrel.
With a September retail sales report showing promising growth and earnings season in progress, investors remain optimistic that corporate America is emerging from the recent earnings recession. Tesla and Netflix are set to release their third-quarter results on Wednesday, providing further insights into the impact of higher borrowing costs on the tech sector.
As the market awaits further economic data, recent indicators suggest that the Federal Reserve may not raise interest rates at its November meeting.