Experts weigh in on September retail sales

Here’s what some experts had to say about September retail sales, which rose 0.6% (excluding autos), with core sales (excludes autos, gas stations and restaurants) up 0.5%.

Kayla Bruun, senior economist, Morning Consult 

"September's retail sales were considerably stronger than expected, with broad-based gains across most categories. Price relief from softer core inflation is helping to blunt the negative impact of elevated gas prices and interest rates on spending, with consumers reporting less sticker shock in September.

However, Morning Consult’s data suggests consumers’ appetite for nonessential spending may be cooling off along with the weather, with U.S. households increasingly focusing on shoring up finances and paying off debts."

David Silverman, senior director, Fitch Ratings

"The U.S. consumer rolls along, as September retail sales, except auto and gas, were reported up 4% compared with September 2022, similar to recent results and suggesting flattish volumes. A growing sea of headwinds, including inflation, rising interest rates, reduced consumer savings and the specter of resumed college loan payments have dominated consumer sentiment discussions.

And while some discretionary categories like furniture and consumer electronics remain pressured, overall spending has remained relatively consistent and above prior year levels. Fitch expect flattish to modestly down volume trends over the next six to 12 months, with discretionary categories more volatile given growing headwinds and continued shifts in spending patterns, which have recently benefited services like travel and entertainment."

Ted Rossman, senior industry analyst, Bankrate

"Breaking a recent trend, September retail sales growth is back above the rate of inflation (albeit slightly). Bar and restaurant sales led the way, followed by non-store retailers (such as e-commerce
shops), health and personal care stores and car dealers.

Despite low consumer sentiment and numerous economic concerns, this report doesn’t indicate that a recession is near. Consumer spending remains remarkably resilient and is actually accelerating in discretionary categories such as dining and big-ticket items such as new cars.
 
Despite these positive numbers, I still think it’s going to be a lukewarm holiday season for retailers. I expect year-over-year holiday sales growth to come in around 2%, which is below the rate of inflation. Many consumers have shifted their spending away from physical goods and toward experiences such as travel, dining and concert tickets. Traditional holiday gift categories such as electronics and clothing actually posted the largest month-over-month decline in this report.”