WASHINGTON: US retail sales unexpectedly increased last month in a broad advance, suggesting resilient demand for merchandise even as production constraints limit supply.
Coronavirus infections increased in August and September, curbing demand for services such as travel and entertainment and leading Americans to shift their spending toward goods, report agencies.
The median estimate in a Bloomberg survey of economists called for a 0.2 per cent decline in overall sales and a 0.5 per cent advance excluding autos.
Higher spending on merchandise is likely to add more pressure to global supply chains, which have struggled to keep up with accelerating demand. The figures cap a quarter in which consumer spending probably slowed, due in part to the delta variant and supply-chain constraints.
Economists currently forecast spending to grow at an annualised 2.2 per cent pace in the three months through September, a massive slowdown from 12 per cent in the second quarter.
“The solid retail sales report reflects both consumer resilience and escalating prices,” Sal Guatieri, senior economist at BMO Capital Markets, said in a note. “The main concern now is that supply-chain disruptions and microchip shortages appear to be spreading, limiting selection and tamping down goods demand.”
The retail sales data showed receipts at restaurants and bars, the only services-spending category in the report, rose 0.3 per cent in September after a 0.2 per cent increase in the prior month. Motor vehicle and parts dealer sales rose 0.5 per cent in September after a 3.3 per cent decline a month earlier, which reflected supply chain constraints that have limited supply and pushed prices upward.
While spending on goods increased, it may prove short-lived heading into the end of the year. Retailers are bracing for a holiday season that’s expected to see 43 per cent of US consumers redirect spending back into experiences, according to a survey from Accenture.