US Retail Sales Show Strong Growth in September

Investing.com — US retail sales grew at a hotter-than-anticipated pace in September, signaling strength in the American consumer that could influence the Federal Reserve's interest rate decisions.

On a monthly basis, retail sales in the world's largest economy rose by 0.4%, accelerating from an unrevised 0.1% uptick in August, according to data from the Commerce Department on Thursday. Economists had projected a reading of 0.3%.

In August, the figure, which includes mostly goods and is not adjusted for inflation, unexpectedly rose, while the July number was revised higher.

Robust spending on items like groceries and clothing helped offset weaknesses in expenditures on higher-priced goods such as furniture and electronics last month.

However, analysts at Capital Economics noted that some disruption from Hurricane Helene in September was "clear" in the weekly advance retail trade data released by the Chicago Fed.

> "Timelier data show a big drop in retail sales in the last week of September as Hurricane Helene made landfall, and Milton added to the disruption two weeks later, so prospects for October and the fourth quarter are looking softer," the analysts said in a note to clients.

The figures come as Fed policymakers consider their next monetary policy decision in November. The central bank recently slashed borrowing costs by an impressive 50 basis points at its last gathering in September, arguing it was necessary to support the US labor market amid waning inflationary pressures.

Separate figures from the Labor Department showed that first-time claims for unemployment benefits dipped to 241,000 in the week ended on October 12. The previous week's number was upwardly revised slightly to 260,000.

Meanwhile, the four-week moving average, which accounts for volatility, rose by 4,750 to 236,250.

Analysts at Vital Knowledge noted, "The hot retail sales number for September fits with the upside pattern from last month… and will push yields higher, causing investors to further question the pace of rate-setting Federal Open Market Committee easing."

They added that several key figures are still pending before the Fed's next decision in November, including third-quarter GDP numbers, the Fed's preferred inflation measure, and the October jobs report.