Ahead of the Bell: US retail sales
WASHINGTON (AP) — Retail sales likely showed a gain in September, helped by solid demand at auto dealerships.
Economists were expecting overall sales to increase 0.8 percent in September, according to FactSet. The Commerce Department will release the report at 8:30 a.m. EDT on Monday.
In August, retail sales rose 0.9 percent, reflecting the fact that consumers paid higher gas prices and bought more cars and trucks. But they were more cautious elsewhere, suggesting that the weak economy may have made them selective about spending.
The retail sales report is closely watched because it is the government's first look at consumer spending each month. Consumer spending accounts for 70 percent of economic activity.
It has increased at a slow pace this year, held back by weak income and job growth for much of the year. Economics have also been concerned that a recent jump in gas prices could leave consumers with less to spend on other items.
U.S. auto companies reported strong demand in September with U.S. sales up 13 percent from a year earlier to nearly 1.2 million. Analysts think sales could hit 14.3 million this year, up 12.8 million last year. Analysts said that low interest rates, aging vehicles that need replacement and popular new models are fueling consistently strong sales this year.
The International Council of Shopping Centers said that 22 nationwide retailers reported that sales were up 3.9 percent in September, according to the International Council of Shopping Centers. That was a slowdown from a 6 percent rise in August. Still, the September results were viewed as offering hope for retailers as they head into the holiday shopping season, a two-month period in which they can make up to 40 percent of their annual revenue.
The overall economy grew at a weak 1.3 percent rate in the April-June quarter and many economists believe that growth showed only a slight improvement to perhaps 2 percent in the July-September period. Growth at that rate is not strong enough to make a significant improvement in unemployment.
But in September, the country got some better news on employment. The unemployment rate dropped to 7.8 percent from 8.1 percent in August. It was the first time the rate has been below 8 percent since January 2009.
The improvement in the labor market helped lift consumer confidence. The Conference Board reported its confidence index rose last month to the highest reading since February. Consumer confidence has fluctuated sharply this year. It has fallen five times in the past nine months, hitting a low for the year in August.