US retail sales were unexpectedly flat in September as high inflation and rapidly rising interest rates caused demand for goods to fall.
The Commerce Department said on Friday that the unchanged reading on last month’s sales followed a 0.4% increase in August, up from a previously reported 0.3% rate.
Economists polled by Reuters were projecting a 0.2% increase in sales, with estimates ranging from a 1.1% decline to a 0.8% rise.
Sales are also decreasing as spending turns to services. Retail sales, which are mostly goods, are not adjusted for inflation.
Rising rent and healthcare costs are squeezing budgets for many Americans, leading to cuts in spending on goods. The situation has been exacerbated by higher borrowing costs, which are making borrowing more expensive.
The Federal Reserve raised its interest rate from near zero in March to the current range of 3.00% to 3.25% as it fights inflation. A fourth straight rise of 0.75 percentage point is expected next month after Thursday’s data showed inflation rose sharply in September.
Excluding automobiles, gasoline, building materials and food services, retail sales rose 0.4% last month. The August data was revised to show a 0.2% increase in this measure, rather than stagnation as previously reported.
Economists estimate that consumer spending growth was likely less than an annualized rate of 1.0% in the third quarter, after increasing at a 2.0% pace in the April-June period.
Still, GDP is expected to have recovered in the last quarter, after two consecutive quarterly declines, mainly as slowing domestic demand reduces imports and leaves a backlog of unsold goods in warehouses.
Source: CNN Brasil
Joe Jameson, a technology journalist with over 2 years of experience, writes for top online news websites. Specializing in the field of technology, Joe provides insights into the latest advancements in the industry. Currently, he contributes to covering the world stock market.
