US retail sales jump 1.1% in September easing recession fears

14 October 2011 17:18  [Source: ICIS news]

WASHINGTON (ICIS)--US retail sales rose in September by 1.1% from August to $395.5bn (€284.76bn), the Department of Commerce said on Friday, an unexpected advance that business interests say makes a new US recession less likely.

In its monthly report, the department noted that September’s retail sales were nearly 8% above the pace of consumer purchases in the same month last year.

The September gain was a marked improvement over the modest 0.3% increase in retail sales in August from July.

The advance has raised hopes among US commercial interests that fears of a new recession would not be realised.

Consumer spending is the driving force of the US economy, accounting for as much as 70% of all production and services.

“The unexpectedly strong sales increase in September may work to dampen fears of a double-dip recession and could indicate an economic and employment rebound,” said Matthew Shay, president of the National Retail Federation (NRF).

“The American consumer and the retail industry continue to lead this recover,” Shay said, “and strong September retail sales are just what the economy needs right now.”

However, NRF noted that much of the September advance in retail sales could be attributed to building materials gains as property owners worked to recover from damage caused by Hurricane Irene. 

The month’s advance also was laid to last-minute, back-to-school shopping that otherwise might have been done in August.

NRF chief economist Jack Kleinhenz cautioned that “while September sales figures were strong, retailers’ fourth-quarter growth will continue to depend heavily on the labour market and consumer confidence, both of which continue to experience weakness”.

($1 = €0.72)

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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