US Retail Sales Exceed Expectations Due to Non-Store Retailers

August's Retail Sales Overview

Following an unexpected rise in US Retail Sales in August (+1.0% MoM), largely attributed to a spike in used car sales, a decrease was anticipated for September (-0.2% MoM). However, just as in July, the headline retail sales figure for September surpassed expectations, increasing by 0.1% MoM. This was mainly due to the performance of non-store retailers. The YoY retail sales print slowed to +2.1%.

Core Retail Sales

On the other hand, core retail sales (excluding Autos) saw a modest increase of just 0.1% MoM, which was less than the projected +0.2%. However, the core YoY print rose to +3.9%.

Motor Vehicle Sales Versus Non-Store Retailers

A closer look at the data reveals a contraction in Motor Vehicle sales, while non-store retailers, primarily internet-based, experienced a surge. Following the previous month's surge, vehicle sales remained flat MoM at their peak, despite a decline in CPI Used car prices suggesting sales were anything but robust. Meanwhile, Non-Store Retailers reached a new record high.

Implications for Interest Rates

The question remains whether these retail figures will influence Powell and his colleagues' decision to cut interest rates by 50bps. The consensus suggests that this is unlikely.

Bottom Line

US retail sales have once again defied expectations, largely due to the performance of non-store retailers. However, the modest growth in core retail sales and the contraction in Motor Vehicle sales suggest a mixed picture. Will these figures influence interest rate decisions? What are your thoughts on this matter? Please share this article with your friends and join the discussion.

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