Retail sales fall in September on drops in autos, gas

Retail sales fell more than expected in September, as consumers slowed their purchases of autos and gasoline.

Sales dropped 0.3 percent last month but have increased 4.3 percent in the past 12 months, the Commerce Department said Wednesday.

{mosads}“Retail sales were surprisingly weak in September,” said Jack Kleinhenz, chief economist for the National Retail Federation.

“Despite increasing consumer confidence, an uptick in employment, lower gas prices and with inflation in check, consumers still slowed spending,” he said.

“Reconciling consumer confidence with consumer spending continues to be a challenge.”

Excluding autos, retail sales were off 0.2 percent.

Consumer spending is closely watched because it accounts for about 70 percent of all economic activity.

Kleinhenz said the consumer outlook is brighter heading into the holiday season, but there are factors that could upset that balance.

“The erratic stock market, geopolitical events and Ebola may contribute to continued volatility. Despite the weak results this month, our outlook remains positive,” he said.

Employers added 248,000 jobs last month, and the monthly average is tracking above 200,000 a month.

Total sales for the July through September period were up 4.5 percent from the same period a year ago, a signal that labor market gains are contributing to more consumer spending.

Auto sales fell 0.8 percent in September but are up 10.4 percent from September 2013.

On the brighter side, sales at restaurants and bars were up 0.6 percent last month and 7.1 percent in the past year.

Gas prices have been falling in the past month — down about 20 cents on average — and that is reflected in slower sales, which were down 0.8 percent in September.

Purchases of clothing fell 1.2 percent, spending on furniture dropped 0.8 percent and sales of building materials dipped 1.1 percent.

Meanwhile, electronics stores rose 3.4 percent last month, boosted by the release of a the new iPhone model. 

Sales at general merchandise stores were up 0.2 percent and spending at health and personal care stores rose 0.3 percent.