Americans keep spending as strikes and hurricanes hammer US factories
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The news: US retail sales rose by 0.4% in September, exceeding expectations as consumer spending remained resilient despite economic pressures.
The numbers: The increase was better than the 0.3% forecast from economists polled by Reuters, and it was broad-based.
Nine out of 13 categories saw gains, led by miscellaneous stores and apparel, according to the US Census Bureau.
The so-called control group sales, which excludes volatile items like autos and petrol, jumped 0.7%, suggesting strong underlying demand.
Separate data by the US Federal Reserve showed industrial production fell 0.3% in September, restrained by a decline in factory output that reflected a strike at Boeing and two hurricanes.
That followed a downwardly revised 0.3% gain in production at factories, mines and utilities a month earlier.
The context: While concerns about the economic outlook and job market are affecting consumer confidence, spending remains robust. As a result, economists expect the Fed is likely to opt for careful 25-basis-point reductions at its upcoming interest rate meetings.
What they said: “Financial pressures are building for many households, but strength in consumption from those at the top of the income spectrum is more than offsetting that story,” said ING chief international economist James Knightley.
“This suggests the Fed will tread carefully with 25 basis point cuts.”
The sources: US Census Bureau , Federal Reserve , Reuters , Bloomberg
