October retail sales data, which were issued today by the United States Department of Commerce and the National Retail Federation (NRF) posted gains, which were again spurred on by sales for certain consumer categories and online shopping.
Commerce reported that total September retail sales—at $549.3 billion—were up 1.9 over August and were up 5.4% annually. And it added that total retail sales, from July through September rose 3.6% compared to the same period in 2019. These gains represented a more than tripling of the 0.6% sequential increase, from July to August and nearly doubling August’s 2.8% annual gain, with both monthly annual and sequential retail sales up every month since June, which was preceded by major declines related to the COVID-19 pandemic.
Commerce reported that retail trade sales saw a 1.9% gain, from August to September, and rose 8.2% annually. And non-store retail, which includes e-commerce, saw a 23.8% annual gain, buoyed by increased e-commerce activity over the course of the ongoing pandemic, with building material and garden equipment and supplies dealers seeing a 19.1% annual gain.
And NRF pointed to September retail sales, which were paced by apparel, continuing a V-shaped recovery from the pandemic, with sales growing for the fourth consecutive month.
“Retail sales are continuing to build on the momentum we’ve seen through the summer and have been boosted by an improving labor market, a rebound in consumer confidence and elevated savings,” NRF Chief Economist Jack Kleinhenz said in a statement. “A significant number of people remain unemployed, but more are going back to work and that makes them confident about spending. September retail sales reflect the support of government measures and elevated savings that is being spent now that consumers are shopping again. With less spending on personal services such as travel and entertainment outside the home, some of that money is shifting to retail cash registers. All in all, these numbers and other economic data show the nation’s economy remains on its recovery path.”
NRF reported that three-quarters of the retail categories it tracks saw annual gains in September, including:
-Clothing and clothing accessory stores were up 11% month-over-month seasonally adjusted but down 12% unadjusted year-over-year;
-Sporting goods stores were up 5.7% month-over-month seasonally adjusted and up 18.3% unadjusted year-over-year;
-General merchandise stores were up 1.8% month-over-month seasonally adjusted and up 4.1% unadjusted year-over-year. Department stores, a subset of the category, were up 9.7 % month-over-month;
-Health and personal care stores were up 1.7% month-over-month seasonally adjusted and up 7.8% unadjusted year-over-year;
-Building materials and garden supply stores were up 0.6% month-over-month seasonally adjusted and up 23.4% unadjusted year-over-year;
-Online and other non-store sales were up 0.5% month-over-month seasonally adjusted and up 27% unadjusted year-over-year;
-Furniture and home furnishings stores were up 0.5% month-over-month seasonally adjusted and up 7.5% unadjusted year-over-year;
-Grocery and beverage stores were unchanged month-over-month seasonally adjusted but up 11.5% unadjusted year-over-year; and
-Electronics and appliance stores were down 1.6% month-over-month seasonally adjusted and down 6.1% unadjusted year-over-year.
“On the surface, the numbers seem at odds with the cessation of enhanced unemployment benefits and with the lack of a deal on new stimulus payments,” wrote Neil Saunders, Managing Director of GlobalData, in a research note. “In theory both things should dampen growth. In practice, there is still momentum in the consumer economy for several reasons. First, a large group of consumers saved their various stimulus payments and so there is a pool of money that is still trickling into retail and boosting spending. Second, a lot of Americans are saving money by not commuting, vacationing and socializing and some of this is being transferred into retail. Third, as the economy continues to open, there is more activity in retail with consumers going out to shops and spending money.”
Saunders added that there is also some early evidence that holiday spending is being brought forward, due to both because retailers are promoting offers and deals more heavily and because consumers want to avoid a last-minute rush.
“We believe that this provided a small material boost to September, and it will be important to see how this trends over the coming months,” he wrote. “The sales increases in earlier months may well depress sales as we move into November and December.”