Consumer spending up marginally in September

Consumer spending dipped in September with the retail sales of goods up 0.55% from a year ago, and down 0.32% from the prior month, according to a recent National Retail Federation Retail (NRF) Monitor report.

“After seven consecutive months of gains, consumers pulled back a bit in September, which is historically a soft month for retail sales,” NRF President and CEO Matthew Shay said. “Due to geopolitical tensions, uncertainty regarding election outcomes, anticipation of the port strike and lingering inflation in services, shoppers showed caution. However, year-over-year gains showed consumers were still spending on household priorities.”

September’s flat report compared to gains of 0.45% month over month and 2.11% year over year in August. The Retail Monitor excludes automobiles and gasoline sales. When also factoring out restaurant sales, consumer purchases were down 0.28% month over month in September and up 0.94% from a year ago.

NRF reports total sales were up 1.91% through the first nine months of the year, with core sales rising 2.18% compared to the year-ago period. The Retail Monitor report is calculated from actual spending records from most retailers. It does not have to be adjusted like the U.S. Census Bureau report which uses survey data. On Thursday, the U.S. Census Bureau reported retail sales increased by 0.4% in September from the previous month. Sales were up 1.7% year over year.

“While there have been some signs of tightening in consumer spending, September’s numbers show consumers are willing to spend where they see value,” said NRF Chief Economist Jack Kleinhenz. “September sales come amid the recent trend of payroll gains and other positive economic signs. Clearly, consumers continue to carry the economy, and conditions for the retail sector remain favorable as we move into the holiday season.”

September’s core retail sales as defined by NRF – based on the Census data but excluding automobile dealers, gasoline stations and restaurants – were up 0.7% month over month and up 2.4% from a year ago. Core retail sales were up 3.3% year over year for the first nine months of the year, in line with NRF’s forecast for 2024 retail sales to grow between 2.5% and 3.5% over 2023.

NRF also is forecasting that 2024 holiday sales will increase between 2.5% and 3.5% over the same time last year. While holiday budgets are increasing overall, almost half of consumers say that high prices on essentials are leading them to cut back this season.

According to a new survey from direct-to-consumer e-commerce platform ESW, 61% of consumers said they would spend more than $600 this year, compared to 48% last year. However, among consumers who said they would reduce spending, 47% cited high prices on items such as groceries and gasoline as the reason they will spend less for the 2024 holiday season.

With consumers becoming more conscious of their spending, quality and price were the most important consideration for 66% of shoppers this holiday season. Only 13% of shoppers agree that brand name is most important when purchasing gifts, ESW reports. 43% of consumers say that they plan to shop more online this holiday season.”

Following are September sales year over year by category as reported by NRF Retail Monitor.
• Online and other non-store sales were up 15.21%
• Clothing and accessories sales increased 10.31%
• Health and personal care sales were up 4.82%
• General merchandise sales rose 2.09%
• Grocery and beverage sales were up 0.42%
• Electronics and appliance sales fell1.63%
• Building and garden supply sales were down 4.25%
• Furniture and home furnishings sales were down 4.8%
• Sporting goods, hobby, music and book sales fell 9.46%