September Retail Sales Up, But Growth Rate Slows

September retail sales were up year-over-year, but the pace of growth appears to be slowing, according to figures from the National Retail Federation (NRF).

The U.S. Census Bureau said overall retail sales in September were up 0.7% from August and up 3.8%. That compared with increases of 0.8% month-over-month and 2.9% in August.

NRF’s calculation of retail sales – which excludes automobile dealers, gasoline stations and restaurants to focus on core retail – showed September was up 0.5% seasonally adjusted from August and up 2.2% unadjusted year-over-year. In August, sales were up 0.2% month-over-month and up 3.6% year-over-year.

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NRF’s numbers were up 3.1% unadjusted on a three-month moving average as of September and up 3.7% for the first nine months of the year.

“September retail sales show that consumers have retained the ability and willingness to spend despite accumulating economic headwinds from higher interest rates and slowing growth,” said Matthew Shay, NRF president and CEO. “As we gear up for the holiday season, we expect moderate growth to continue as consumers focus on value and household priorities. Retailers have been hard at work getting holiday inventories in place to provide consumers with great products, competitive prices and convenience at every opportunity.”

Jack Kleinhenz, chief economist with the NRF, said September retail sales show households are forging ahead with plenty of buying power despite persistent inflation, rising interest rates and geopolitical conflicts. 

“Firm payroll growth over the past few months has likely helped spending across retail sectors,” he said. “However, much of the rise was due to car sales, gasoline prices and food services. When you exclude those categories and look at core retail as measured by NRF, the pace of year-over-year growth is slowing.”

September sales were up in five out of nine retail categories on a yearly basis, led by health and personal care stores, online sales and general merchandise stores, and up or unchanged in all but three categories on a monthly basis. Specifics from key sectors include:

• Health and personal care stores were up 0.8% month-over-month seasonally adjusted and up 7.3% unadjusted year-over-year.
• Online and other non-store sales were up 1.1% month-over-month seasonally adjusted and up 6.2% unadjusted year-over-year.
• General merchandise stores were up 0.4% month-over-month seasonally adjusted and up 3% unadjusted year-over-year.
• Grocery and beverage stores were up 0.4% month-over-month seasonally adjusted and up 2.1% unadjusted year-over-year.
• Clothing and clothing accessory stores were down 0.8% month-over-month seasonally adjusted but up 0.8% unadjusted year-over-year.
• Sporting goods stores were unchanged month-over-month seasonally adjusted but down 1.6% unadjusted year-over-year.
• Electronics and appliance stores were down 0.8% month-over-month seasonally adjusted and down 2.5% unadjusted year-over-year.
• Furniture and home furnishings stores were unchanged month-over-month seasonally adjusted but down 6.5% unadjusted year-over-year.
• Building materials and garden supply stores were down 0.2% month-over-month seasonally adjusted and down 6.5% unadjusted year-over-year.