ANL 12.54 Decreased By ▼ -1.01 (-7.45%)
ASC 12.70 Decreased By ▼ -0.62 (-4.65%)
ASL 13.46 Decreased By ▼ -0.56 (-3.99%)
BOP 8.38 Increased By ▲ 0.02 (0.24%)
BYCO 5.96 Decreased By ▼ -0.18 (-2.93%)
FCCL 17.08 Decreased By ▼ -0.53 (-3.01%)
FFBL 24.05 Decreased By ▼ -0.85 (-3.41%)
FFL 9.97 Decreased By ▼ -0.28 (-2.73%)
FNEL 9.25 Decreased By ▼ -0.55 (-5.61%)
GGGL 14.00 Decreased By ▼ -1.30 (-8.5%)
GGL 27.05 Decreased By ▼ -2.45 (-8.31%)
HUMNL 5.73 Decreased By ▼ -0.17 (-2.88%)
JSCL 15.00 Decreased By ▼ -1.00 (-6.25%)
KAPCO 31.60 Decreased By ▼ -0.45 (-1.4%)
KEL 3.22 Increased By ▲ 0.05 (1.58%)
MDTL 2.09 Decreased By ▼ -0.12 (-5.43%)
MLCF 32.75 Decreased By ▼ -1.64 (-4.77%)
NETSOL 90.21 Decreased By ▼ -5.29 (-5.54%)
PACE 4.10 Decreased By ▼ -0.15 (-3.53%)
PAEL 20.51 Decreased By ▼ -0.92 (-4.29%)
PIBTL 7.25 Decreased By ▼ -0.35 (-4.61%)
POWER 6.39 Decreased By ▼ -0.21 (-3.18%)
PRL 11.95 Decreased By ▼ -0.74 (-5.83%)
PTC 8.80 Increased By ▲ 0.05 (0.57%)
SILK 1.17 Decreased By ▼ -0.08 (-6.4%)
SNGP 37.70 Decreased By ▼ -0.98 (-2.53%)
TELE 14.85 Decreased By ▼ -1.03 (-6.49%)
TRG 77.68 Decreased By ▼ -4.05 (-4.96%)
UNITY 22.90 Decreased By ▼ -0.80 (-3.38%)
WTL 2.03 Decreased By ▼ -0.02 (-0.98%)
BR100 4,427 Increased By ▲ 26.2 (0.6%)
BR30 17,105 Decreased By ▼ -388.97 (-2.22%)
KSE100 43,380 Increased By ▲ 145.54 (0.34%)
KSE30 16,791 Increased By ▲ 93.48 (0.56%)

Coronavirus
LOW Source: covid.gov.pk
Pakistan Deaths
28,753
824hr
Pakistan Cases
1,286,022
39124hr
0.89% positivity
Sindh
476,233
Punjab
443,310
Balochistan
33,491
Islamabad
107,811
KPK
180,194
World

Higher prices help to boost US retail sales in September

  • Retail sales increase 0.7% in September
  • Higher prices contributed to boosting receipts
  • Core retail sales rise 0.8%; August revised slightly up
Updated 15 Oct 2021

WASHINGTON: US retail sales unexpectedly rose in September, boosted in part by a jump in receipts at auto dealerships due to higher motor vehicle prices, but there are fears that supply constraints could disrupt the holiday shopping season amid continued shortages of goods.

Retail sales rose 0.7% last month, the Commerce Department said on Friday. Data for August was revised higher to show retail sales increasing 0.9% instead of 0.7% as previously reported. Sales last month were partly lifted by higher prices, with inflation increasing solidly in September.

Economists polled by Reuters had forecast retail sales would slip 0.2%. An ongoing global shortage of microchips is forcing automakers to cut production, leading to a scarcity of inventory at showrooms, which is boosting prices and limiting choice for buyers. Other goods are also in short supply amid congestion at ports because of a dearth of workers.

"The solid retail sales report reflects both consumer resilience and escalating prices," said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. "The main concern now is that supply-chain disruptions and microchip shortages appear to be spreading, limiting selection and tamping down goods demand."

US President Joe Biden on Wednesday announced that the Port of Los Angeles would join the Port of Long Beach, two of the country's busiest, in expanding round-the-clock operations to unload an estimated 500,000 containers on cargo ships offshore.

Spending shifted to goods from services over the course of the COVID-19 pandemic, straining supply chains. The rotation back to services, such as travel and dining out, has been slowed by a resurgence in coronavirus infections over the summer, driven by the Delta variant.

Retail sales are mostly made up of goods, with services, including healthcare, education, travel and hotel accommodation, making up the remaining portion of consumer spending. Restaurants and bars are the only services category in the retail sales report.

Auto Receipts Rise

In September, sales at auto dealerships surprisingly rose 0.5% after decreasing 3.3% in August. With unit sales declining, the increase in receipts likely reflected higher prices amid severe shortages. The average price of a new motor vehicle topped $45,000 for the first time ever in September, according to a report this week from Kelley Blue Book, a vehicle valuation and automotive research company in California.

Online retail sales rose 0.6% after rebounding 5.7% in August. Sales at clothing stores jumped 1.1%. More workers returned to offices after the Labor Day holiday and may have needed a new wardrobe after more than a year of working from home because of the pandemic.

Receipts at building material stores nudged up 0.1% and furniture outlets gained 0.2%. There was also an increase in receipts at sporting goods, hobby, musical instrument and book stores. With coronavirus infections ebbing, the flow of traffic to restaurants and bars increased, lifting sales 0.3%.

But sales at electronics and appliance stores dropped 0.9%.

Excluding automobiles, gasoline, building materials and food services, retail sales rose 0.8% last month after an upwardly revised 2.6% increase in August. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. They were previously estimated to have surged 2.5% in August.

Economists believe consumer spending, which accounts for more than two-thirds of US economic activity, almost stalled in the third quarter after a robust 12.0% annualized growth pace in the April-June period. Consumer spending growth estimates for the third quarter are around a 2.0% rate.

Sluggish consumer spending also suggests that GDP growth braked sharply in the July-September quarter from the second-quarter's 6.7% pace. The Atlanta Federal Reserve forecasts the economy grew at a 1.3% rate last quarter.

The government will publish its snapshot of third-quarter GDP growth at the end of this month. Some of the anticipated slowdown in growth reflects the fading stimulus from trillions of dollars in pandemic relief from the government.

With hefty savings and a tightening labor market boosting wages, the foundation for the economy and consumer spending is solid. The saving rate increased at a 10.5% rate in the second quarter. There were 10.4 million job openings at the end of August.

"Of course, strong job gains and an elevated savings rate should provide consumers with an arsenal of available funds for spending after what appears to be a pause in the third quarter as the Delta variant spread and fiscal economic impact payments faded," said Kevin Cummins, chief US economist at NatWest Markets in Stamford, Connecticut.

We love hearing your feedback, please help us improve by answering these few survey questions

Comments

Comments are closed.