U.S. retail sales grew more than expected in September, showcasing resilient consumer spending that continues to fuel the economy.
According to data released by the Commerce Department on Thursday, the value of retail purchases rose by 0.4%, unadjusted for inflation, following a modest 0.1% gain in August.
Excluding sales from auto dealerships and gasoline stations, sales increased by 0.7%.
This broad-based sales growth signals another solid quarter of economic expansion, driven by robust consumer demand and a strong labour market.
Although the retail sales report does not alter expectations that the Federal Reserve will lower interest rates by 25 basis points next month, it reinforces evidence that the economy is maintaining momentum with little sign of a significant slowdown.
While the retail data points to sustained economic strength, other reports released on Thursday were influenced by temporary factors.
Industrial production declined in September, affected by the impact of two hurricanes and a strike at Boeing Co.
Additionally, jobless claims fell after a previous surge, which had been driven by Hurricane Helene and job cuts in the auto industry, particularly in the Midwest.
In the retail sector, 10 of the 13 categories tracked showed gains, with miscellaneous store retailers — such as florists and pet stores — leading the way. Clothing and grocery stores also posted solid growth, while gasoline station receipts fell due to lower fuel prices. Auto sales barely increased, despite expectations of a stronger rise.
The report's "control-group" sales, which exclude food services, auto dealers, building materials stores, and gasoline stations, jumped by 0.7% — the strongest increase in three months.
Over the past three months, control-group sales have grown at a robust 6.4% annualised rate, the fastest pace since early 2023.