U.S. retail sales rose more than expected in September as households increased car purchases and spent more on restaurants, suggesting the economy ended the third quarter on a strong footing.
The Commerce Department said today that retail sales rose 0.7 percent last month. The August data was revised upwards to show sales rising by 0.8 percent instead of 0.6 percent as previously reported.
Excluding automobiles, gasoline, building materials and food services, retail sales rose 0.6 percent in September. The August data was revised to show that the so-called core retail sales rose 0.2 percent and not 0.1 percent as previously reported.
According to” Reuters”, core retail sales closely correspond to the consumer spending component of GDP. Consumer spending is expected to accelerate in the third quarter thanks to the rise in July . Spending on services also remains strong, which should lift overall consumption.
GDP growth estimates for the third quarter currently point to an annualized rate of 5.1 percent.
The economy grew at a 2.1 percent pace in the April-June quarter and is continuing to move forward despite the Fed raising its benchmark overnight interest rate by 525 basis points since March 2022.
