U.S. headline retail sales comes in below expectations in September

U.S. retail sales report for the month of September came in mixed. On a sequential basis, total sales rose modestly by 0.1 percent, as compared with consensus expectations of a rise of 0.6 percent, driven by softness in gas station and food services sales. Meanwhile, core sales performed better than expected, rising by 0.5 percent sequentially led by a widespread rise throughout sub-categories. On a year-on-year basis, total retail sales rose 5.9 percent and indicate towards healthy consumer demand in the third quarter.

Delving into details, gasoline station sales dropped 0.8 percent on a sequential basis, while food services sales dropped surprisingly by 1.8 percent, the first fall in four months. Auto sales recovered, rising 0.8 percent, in line with the rise in vehicle sales reported by manufacturers earlier in the month.

At the core level, the rise in sales was led by non-store retailers, furniture and electronics, while most other categories also saw gains. Meanwhile, department store sales saw a decline for the second straight month.

Strength in core sales were more than countered by the surprising drop in food services sales.

“On the other hand, elements of retail sales that feed in to our residential investment tracking were a touch stronger than we had expected, and pushed our residential investment tracking slightly higher. In all, today’s report lowered our GDP tracker by a tenth, to 3.1 percent”, stated Barclays. 

At 17:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -70.9906. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex