Home Breadcrumb caret Economy Breadcrumb caret Economic Indicators U.S. consumer spending well below estimates Spending edged up a slight 0.1% in September By Staff, with files from The Associated Press | October 15, 2018 | Last updated on October 15, 2018 2 min read © Aleksandr Stepanov / 123RF Stock Photo U.S. consumer spending edged up a slight 0.1% in September, a disappointing performance in which rebounding auto sales were offset by weakness in other areas. The Commerce Department said Monday that the scant gain in September followed an equally meagre 0.1% increase in August. It was the weakest two-month performance since the start of the year and was well below economist projections of a solid 0.6% rise in sales. Retail sales are closely watched for signs they can provide for consumer spending, which drives two-thirds of economic activity. The economy expanded at a sizzling 4.2% rate in the second quarter. Analysts have been forecasting that growth will come in at still-solid rate above 3% in the just completed third quarter, but the weakness in retail sales may cause them to rethink their forecasts. Not all economists are disappointed, however. Derek Holt, vice-president and head of Capital Markets Economics at Scotiabank, said Q3 was “a strong quarter overall.” “While headline sales disappointed, the underlying details are considerably better,” he said in a research note. “Both the USD on a [U.S. Dollar Index] basis and the [two-year] Treasury yield were largely unaffected.” The details The modest September gain was led by a 0.8% rise in auto sales which represented a rebound from a 0.5% decline in July. Analysts had been expecting the increase, believing that sales would get a boost last month from purchases of replacement cars damaged by Hurricane Florence. But excluding autos, retail sales fell 0.1% after sales excluding autos rose 0.2% in August. In a more encouraging sign, sales in a so-called control group that feeds into calculations for the gross domestic product were up 0.5% in September after being flat in August. Gasoline sales fell 0.8% in September after a 1.1% jump in August. That swing was influenced by prices which have retreated a bit after a big jump in August. The average price for a gallon of regular gas is US$2.83 up from US$2.47 a year ago, according to a nationwide survey by AAA. Sales at general merchandise stores, which include big box stores such as Walmart and Target, rose 0.3% while sales at department stores fell 0.8%. Staff, with files from The Associated Press The Associated Press is an American not-for-profit news agency headquartered in New York City. Save Stroke 1 Print Group 8 Share LI logo