September Retail Sales Rose 0.8%. Look at Where the Money Went.
Photo by Clay Banks on Unsplash
The headline is good news. Retail sales rose 0.8% in September to $745.0 billion, and they are up 6.3% from a year ago.
Now read the second line. Take out gas stations and the monthly gain shrinks to 0.2%. Gas stations themselves jumped 6.4%.
That is a different story from the one the top number tells. A lot of that growth is people paying more to fill the tank, not people choosing to buy more. These figures are also not adjusted for inflation, so some of the strength is simply higher prices showing up on the receipt.
I see this often in conversations with buyers and sellers. The national number says consumers are fine. The household budget says something more complicated. When a bigger share of the month goes to the basics, the money left for everything else gets tighter, and that includes the down payment fund and the monthly housing number.
There is one detail worth a second look. Furniture and home stores rose 1.3%, the strongest of the categories I would watch from a real estate desk.
I would not oversell it. One month is one month. But it is a mild positive for the parts of a sale that happen around the contract. Sellers who stage and buyers who are about to move in both spend in that category. A rise there suggests some people are still willing to put money into a house, even while other costs press on them.
For sellers, the practical read is that presentation still has an audience. A home that shows well, with a kitchen and living space that look ready for a buyer's furniture, is working in a market where households are choosing carefully. For buyers, it is a reminder to budget for the weeks after closing, not just the closing itself.
My takeaway is simple. Do not take comfort from the 0.8% alone. The 0.2% is the number that tells you how much room people have left to spend.
The Census Bureau released these figures on Oct. 15. The next release is Nov. 17, and I will be watching to see whether gas continues to carry the total or whether the rest of the categories pick up.
