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Economic News

US Retail Sales Beat Expectations Again

October 17, 2023
Francis Généreux
Principal Economist


  • Retail sales rose 0.7% in September after a 0.8% advance in August.
  • Motor vehicle sales were up 1.0% after a 0.4% gain the month before. Gasoline station receipts jumped 0.9%. Excluding motor vehicles and gasoline, sales were up 0.6% on the heels of a 0.3% increase in August.
  • Aside from cars and gas, sales growth was led by nonstore retailers (+1.1%), food services (+0.9%) and miscellaneous store retailers (+3.0%). Only clothing stores (-0.8%), electronics stores (-0.8%) and building materials stores (-0.2%) reported a dip in sales.
  • Industrial production was up 0.3% in September after a flat August. Both manufacturing output and mining rose 0.4%. Energy production fell 0.3% on the month. 


Like the jobs market, US consumer spending continues to be resilient. Monthly retail sales growth excluding motor vehicles topped 0.6% for the third straight month in September after averaging just 0.2% the first six months of the year. September’s headline number was three times higher than the consensus forecast. Several retail categories posted strong sales gains despite more pessimistic preliminary card transaction data. And quarterly retail sales suggest real consumer spending is picking up. That would put annualized quarterly real GDP growth close to 5%, the strongest reading since late 2021.

Industrial production posted a solid 0.3% gain, beating the 0.0% consensus forecast. This upside surprise was led by the auto industry, which managed a 0.3% increase after a 4.1% decline in August despite strikes at some Big Three auto plants since mid-September. Fabricated metal products, aerospace and plastics reported the biggest monthly gains. 


In the latest sign the US economy remains resilient in the face of rising interest rates, retail sales beat expectations again in September, suggesting real consumption picked up sharply in the third quarter. Even industrial production came in strong despite a number of obstacles. The next Federal Reserve meeting is shaping up to be a live one.