Broker Check
5568 General Washington Drive
Suite A-217
Alexandria, VA 22312-2465
Office: (703) 750-3393
Direct: (703) 813-5551
Toll Free: (800) 445-5595
Fax: (703) 813-6170
Solid Retail Sales in September

Solid Retail Sales in September

| October 19, 2021
Share |

The U.S. Census Bureau reported overall retail sales grew 0.7% month over month in September vs. forecasts for a 0.2% decline, while retail sales excluding autos and gas also saw solid gains, rising 0.7% month over month vs. estimates for a 0.4% increase. On a year-over-year basis, sales rose a solid 13.9%, slightly lower than August’s 15.4%. Excluding autos and gas, sales rose 15.6%. Total retail sales rose over the past two months and three of the past four, as shown in the LPL Financial Chart of the Day, despite the impact of the Delta COVID-19 wave this summer.

See enlarged chart.

Positive revisions to August retail sales (from 0.7% headline to 0.9%, and from 2.0% to 2.1% ex. autos and gas) provided further evidence of consumers’ resilience in the face of the latest COVID-19 wave, not to mention supply chain disruptions that limited supply of certain goods.

“The retail sales numbers are encouraging in the face of elevated Delta variant cases in September and supply chain issues many companies are facing,” explained LPL Financial Equity Strategist Jeffrey Buchbinder. “The shift away from services to goods last month makes sense as a pandemic response but the next uptick in sales is likely to be led by services if COVID-19 cases continued their recent convincing decline as we expect.”

But we don’t want to dismiss the major impact Delta has had on consumers. After a 12% increase in consumer spending in the second quarter, consumer spending may only grow 2-3% annualized in the third quarter, based on Bloomberg’s consensus forecast from economists and data from the Bureau of Economic Analysis.

The mix shift in September also reflects Delta’s impact. The upside to forecasts reflected a shift from services to goods, consistent with elevated Delta COVID-19 cases during September that weighed on services activity. Auto sales rose 0.5% month over month despite the ongoing chip shortage. Merchandise sales rose 2%. Clothing rose 1.1%. We expect services spending to pick up in the fourth quarter as the next phase of the reopening occurs.

These are solid numbers in the face of several challenges. Consumers still have significant excess savings and are enjoying rising wages. The job market continues to heal as COVID-19 cases decline. Inflation is eroding some spending power but we remain in the transitory camp and see inflation pressures easing over the next several months.

 

IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

All index data from Bloomberg.

This Research material was prepared by LPL Financial, LLC.

Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC).

Insurance products are offered through LPL or its licensed affiliates.  To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL affiliate, please note LPL makes no representation with respect to such entity.

  • Not Insured by FDIC/NCUA or Any Other Government Agency
  • Not Bank/Credit Union Guaranteed
  • Not Bank/Credit Union Deposits or Obligations
  • May Lose Value

For Public Use – Tracking # 1-05202411

Share |