Retail sales were better than anticipated in September as broad based gains helped offset a 10.4 percent decline in motor vehicle sales.
Total retail sales declined by 1.5 percent in September, less than the 2.1 percent drop economists had forecast. Excluding auto sales, which experienced their largest monthly fall since August 2005, retail sales were 0.5 percent higher in September, better than forecasts for a 0.2 percent increase.
Economists expected the expiration of the government's Cash for Clunkers rebate program to drag down the monthly change in total retail sales, however a 1.4 percent gain in home furnishing sales, a 1.1 percent increase in gasoline sales, a 0.9 percent boost in grocery sales, and a 0.9 percent improvement in general merchandise purchases helped offset the anticipated decline in auto sales.
Here is a table from the Census Department:
Increased purchases of furniture and home furnishings of are particular interest to Mortgage News Daily. The soon to expire first time home buyer tax credit is contributing to positive macroeconomic progress in ways other than home sales as consumers are spending money on goods to furnish their new homes.
As a caveat to that observation, while the percentage change in furniture sales is large relative to gains in other categories, the dollar amount change was minimal as the furniture and home furnishing category is a small contributor to total retail sales.
Here is a chart of retail sales in dollar amounts:
Although the previous two retail sales reports imply a strengthening consumer, ongoing job losses remain a concern for economic outlooks. Mortgage News Daily remains skeptical of a consumer led recovery as the labor market continues to contract and mortgage delinquencies persistently rise.