The Census Bureau said that retail sales rose a strong 1.1 percent in September. This builds on the healthy 0.7 percent and 1.2 percent gains in July and August, respectively, which should bode well for second quarter consumption and GDP figures. In general, the consumer has continued to spend, despite a number of economic headwinds, with year-over-year retail sales up 4.8 percent.
The primary driver of increased sales in September was the new iPhone. Retail spending in the electronics and appliances sector was up 4.5 percent. Outside of electronics, the other leading sectors were gasoline stations (up 2.5 percent), non-store retailers (up 1.8 percent), motor vehicles (up 1.3 percent), food and beverages (up 1.2 percent), and building materials (up 1.1 percent). Department store sales were the only weak area, down 0.2 percent.
In general, higher retail sales figures match up with other recent economic indicators, including data on personal spending and consumer confidence. Even with slowing global growth and uncertainties in the U.S. regarding the fiscal cliff, Americans remain cautiously positive about the future, with modest gains in spending. This might seem counterintuitive, and yet, it appears that consumers have yet to react to the fiscal cliff or other economic pressures, perhaps even discounting them.
Chad Moutray is chief economist, National Association of Manufacturers.