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US retail sales beat expectations in September, Reuters reported on Thursday, helped by higher gasoline prices. Our economic calendar had forecast a 0.3% rise month on month, after a 1.2% increase in the previous reading.
What happened
The US government's monthly retail sales report showed spending at shops and other retailers came in stronger than forecast for September. According to Reuters, higher gasoline prices were a key reason for the beat. When fuel costs more, the value of sales at gas stations goes up even if people do not buy more fuel.
The figures
Before the release, the consensus forecast in our economic calendar was a 0.3% rise month on month. The previous reading showed a 1.2% increase, a strong gain that set a high bar for September. The latest figure came in above the 0.3% forecast. Retail sales are measured in value, not volume, so price changes feed directly into the headline number.
- 1Higher gasoline pricesFuel costs more at the pump
- 2Bigger fuel receiptsGas station sales rise in value
- 3Headline sales liftedTotal beats market expectations
Why it matters
Consumer spending is the largest part of the US economy, so retail sales are one of the most closely watched monthly reports. A stronger-than-expected figure can change how traders view the health of the US consumer and the outlook for interest rates. When the beat is driven mainly by fuel prices, analysts often look closer at the details, because higher prices at the pump do not necessarily mean people are buying more goods. For traders, reports like this one can bring short bursts of volatility in the US dollar, stock indices and bond yields around the release.
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Gasoline prices remain an important factor for the coming months, since they can lift or weigh on the headline figure regardless of underlying demand. Traders will also compare this report with other US data on consumer spending and inflation to build a fuller picture. We will cover the next retail sales release on our economic calendar.
Sources: Reuters.
