ARLINGTON, Va.—Total retail sales fell 0.3% in September, ending six consecutive months of sturdy growth. Separately new Federal Reserve Beige Book data reveal the economy expanded only slightly in September.
"During that [six-month] stretch, sales increased 4.5%, which would make for a solid 12 months and in fact exceeds the year-over-year gain in sales (4.1%)," observed NAFCU Chief Economist and Vice President of Research Curt Long. "One down month is nothing to fret over, but it does add to the evidence that the economy is slowing, and it supports further accommodation from the Fed."
Year-over-year growth in retail sales was 4.1% in September, down from 4.4% in August. Control group sales increased 4.9% from a year ago. Among the major retail segments, seven of the 13 categories fell in September with auto and gas sales suffering the sharpest drops.
Long reiterated NAFCU expects the FOMC to issue another 25-basis point rate cut at the end of its meeting later this month.
Beige Book Data
Meanwhile, Beige Book data reveal the economy expanded only slightly in September following modest growth in August. Tariffs and trade tensions were among reasons cited for drags on the economy.
NAFCU Chief Economist and Vice President of Research Curt Long, after analyzing new retail sales data, noted the slowing economy and said the association expects the Federal Open Market Committee to cut rates again later this month.
According to the Fed, non-auto retail sales increased modestly, while light auto sales were "generally more robust." Employment rose slightly throughout the month, though there were reports of worker shortages.
In terms of prices, the Fed said retailers and manufacturers noted rising input costs for items subject to new tariffs. Even in the face of rising fuel costs, shipping prices remained lower than earlier in the year due to large capacity, Long noted.
Other Highlights
Other highlights from this month's Beige Book include:
- Tourism and travel-related spending was up across the month
- Housing market conditions remained largely the same as the previous month
- Nonresidential construction increased modestly while leasing activity continued to be slow yet steady
- Certain districts suggested that persistent trade tensions and slow global growth affected activity negatively
- Employment wages rose moderately across the month