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News > Economy
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Retail sales fall
Consumer spending, pillar of world's largest economy, is hurt by slower automobile sales.
October 11, 2002: 10:13 AM EDT

NEW YORK (CNN/Money) - Retail sales fell in the United States in September, the government said Friday, dragged down mostly by a sharp drop in automobile sales following a glut of summer car-buying.

The Commerce Department said retail sales fell 1.2 percent to $302.5 billion after rising a revised 0.6 percent in August. Excluding volatile automobile sales, retail sales rose 0.1 percent after rising a revised 0.3 percent in August.

Economists, on average, expected sales to fall 1.1 percent and "core" sales to rise 0.1 percent, according to Briefing.com.

"Given the extraordinarily weak chain store sales numbers [in September], this report comes as a huge relief -- it could have been much worse," Ian Shepherdson, chief U.S. economist at High Frequency Economics Ltd., said in a note.

Separately, the Labor Department said its producer price index, a measure of wholesale inflation, rose 0.1 percent in September after being flat in August. Excluding food and energy prices, "core" PPI also rose 0.1 percent after falling 0.1 percent in August.

Both gains in wholesale inflation matched the consensus expectation of economists, according to Briefing.com.

The reports had little impact on U.S. stock market futures, which rose, pointing to a higher opening on Wall Street. Treasury bond prices fell.

Retail sales are closely watched by economists because consumer spending makes up about two-thirds of the total U.S. economy.

Sales at major retailers such as Wal-Mart (WMT: Research, Estimates) and Target (TGT: Research, Estimates) have been disappointing so far this fall, with consumers worried about a dismal labor market, a potential war in Iraq, and falling stock prices.

And sales don't promise to be much better the rest of the year, especially with the disruption caused by the 10-day lockout of West Coast dockworkers.

Strong auto sales, driven by aggressive automaker incentives, such as zero-percent financing, had helped boost consumer spending in the summer. But with the expiration of such incentives, economists expected auto sales to fall off, and they weren't disappointed -- sales plunged 5.2 percent, compared with a 1.6 percent gain in August. Sales were still 7.9 percent higher than a year ago, however.

"Auto sales did not fall as far as the unit sales numbers suggested," Shepherdson said. "This means there'll probably be a catch-up -- downwards -- next month."

Most other categories of sales fell as well, including a 0.9 percent drop in clothing sales, offset by gains in building materials, health care products, and sporting goods.  Top of page




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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.