Americans rang up more at the register in September, with total retail sales up 0.8% from August. That follows a 1.3% bump the month before, after revisions, so September's pace is coming off a high base.
Most of the oomph came from the pump. Gas station sales climbed 6.4% in value, the biggest monthly increase in half a year. The American Automobile Association said the average gallon nearly reached $4.50 in September. Strip out motor vehicles and gasoline, and sales rose a milder 0.2%.
Eight of the 13 retail categories posted gains. Keep in mind these figures are not adjusted for inflation, so fatter dollar totals can reflect higher prices as much as heavier foot traffic.
Gas propped up the headline, while the rest was a mixed bag. Shoppers spent more at furniture and electronics stores and at restaurants, but eased off on hobbies and building materials.
Bars and restaurants - the only services category in the report - saw a 1.1% increase. Meanwhile, the control group used to calculate goods spending in GDP ticked up 0.1% after a big jump in August; by design it omits food services, auto dealers, building materials and gas stations.
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EY-Parthenon's Gregory Daco and Lydia Boussour said consumers are still spending but lost steam after August's strong appetite, and that while resilience remains, the inflation squeeze is getting clearer.
Bloomberg Economics' Eliza Winger made a similar point: pricier gasoline did much of the lifting, so the headline likely overstates demand. She viewed the near-flat control group as more of a comedown from August than a sharp retrenchment.
Inflation pressures are part of the backdrop. Data published Thursday by the Bureau of Labor Statistics showed producer prices climbed in September at the fastest pace in more than four years.
As the third quarter wrapped, shoppers tapped the brakes a bit while higher prices pinched paychecks. Still, spending this year has leaned on a sturdy job market, bigger-than-usual tax refunds and stock market gains. On recent calls, the chiefs of Domino's Pizza Inc. and Albertsons Cos. noted many households are in a tough spot, while Wells Fargo & Co., JPMorgan Chase & Co. and Citigroup Inc. pointed to a consumer that continues to hold up.
"We continue to be very impressed with the resilience that consumers have demonstrated as they continue to spend and power our economy," said the National Retail Federation's chief economist, Mark Mathews. The group expects that strength to extend into the holiday season despite inflation and softer confidence. Separately, initial claims for unemployment insurance stayed near historically low levels.
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