Rising prices flatter U.S. retail sales; demand for goods remains strong

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U.S. retail sales rise unexpectedly in September, but there are fears that supply constraints amid continued shortages of goods could disrupt the shopping season

Spending shifted to goods from services over the course of the COVID-19 pandemic, straining supply chains. The rotation back to services, such as travel and dining out, has been slowed by a resurgence in coronavirus infections over the summer, driven by the Delta variant.

A survey from the University of Michigan on Friday showed consumer sentiment slipped further in early October because of the endless pandemic and the political wrangling in Washington over raising the federal government debt limit as well as more spending for infrastructure and social programs. Stocks on Wall Street were trading higher. The dollar dipped against a basket of currencies. U.S. Treasury prices fell.In September, sales at auto dealerships rose 0.5% after decreasing 3.3% in August. With unit sales declining, the increase in receipts reflected higher prices.

Sales at service stations surged 1.8% because of higher gasoline prices. There was also an increase in receipts at sporting goods, hobby, musical instrument and book stores.

 

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