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Retail sales rose in September as people kept shopping

Retail sales climbed in September for the fifth straight month as people spent on clothing and sporting goods. CNN's Christine Romans reports.

Posted: Oct 18, 2020 11:41 AM
Updated: Oct 18, 2020 11:41 AM

Retail sales climbed in September for the fifth straight month as people spent on clothing, sporting goods, furniture and other items in stores and online.

US retail sales rose 1.9% in September, the Commerce Department reported Friday. That's well above the 0.7% rise predicted by economists surveyed by Refinitiv. In August, retail sales grew 0.6%.

Retail sales had slumped to a seven-year low in April as coronavirus prompted stores across the country to shut their doors, though sales bounced back to pre-pandemic levels in July.

Economists and retail analysts say consumers have shifted their spending -- away from travel and leisure and to areas such as home improvement and electronics. Sales at clothing and clothing accessories stores grew 11% in September from the month prior, while sales at sporting goods, hobby, musical instrument and book stores jumped 5.7%.

"Consumers are spending less money on services and reallocating those funds," said Russell Price, chief economist at Ameriprise.

People are also spending some of their savings, economists say. The personal savings rate hit its highest level in March since in 1981 and remains higher than it was prior to the pandemic.

Despite the rise in retail sales in September, additional stimulus funds are needed to help drive lower-income consumer spending, experts note.

The unemployment rate stood at 7.9% in September and the country is still down 10.7 million jobs since February, before Covid-19 hit. Americans filed another 898,000 first-time jobless claims last week on a seasonally-adjusted basis, the Department of Labor said Thursday. That's more than economists had expected and up 53,000 from the prior week.

A supplemental $600 weekly unemployment insurance, which had been part of the government's first stimulus bill, ran out at the end of July. Since then, Congress has been unable to agree on another boost to jobless benefits. President Donald Trump signed an executive order to bolster benefits again, although by less money, by diverting funds from the Federal Emergency Management Agency.

"Although sales growth is strong, it will slow through the rest of this year and into next year," said Gus Faucher, chief economist for PNC Financial Services. He warned growth would continue slowing if Congress does not provide new stimulus funds.

Scott McCall, chief merchandising officer at Walmart, the largest US retailer, said in an interview this week that stimulus funds would help boost shoppers during the holiday season.

"We know when there's more money in customers' pockets they like to spend it on the items that are important for them for holidays," said McCall.

And although retail sales have rebounded since the spring, the spending has not benefited all retailers.

"It isn't a case of all retail boats rising with consumer spending," said Greg Portell, lead partner in the global consumer practice of Kearney, a strategy and management consulting firm.

So far in 2020, around 8,000 stores have said they will permanently close, according to Coresight Research, a retail research and advisory firm. It anticipates closures will set a new annual record this year with as many as 25,000, breaking last year's record 9,302 closures tracked by the firm.

In addition, foot traffic to brick-and-mortar stores remains weak because of the pandemic. Traffic was down 43% during the first week of October compared with the same stretch last year, according to data from Cowen.

California Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 923648

Reported Deaths: 17559
CountyConfirmedDeaths
Los Angeles3050707044
Riverside675521306
San Bernardino641311073
Orange594421468
San Diego55898885
Kern34114420
Fresno31195439
Sacramento25882499
Santa Clara24665404
Alameda23636463
San Joaquin21988492
Contra Costa18877243
Stanislaus17814400
Tulare17730291
Ventura14409166
Imperial13023338
San Francisco12277145
Monterey1153892
San Mateo11278159
Santa Barbara9886126
Sonoma9601136
Merced9588155
Kings848683
Solano758676
Marin7107127
Madera506676
Placer429059
San Luis Obispo424032
Yolo325060
Butte313453
Santa Cruz284825
Shasta199931
Napa199816
Sutter188912
San Benito144915
El Dorado13684
Yuba133810
Mendocino115421
Tehama9219
Lassen7711
Lake70216
Glenn6793
Nevada6328
Humboldt56910
Colusa5536
Calaveras34721
Amador33716
Tuolumne2855
Inyo24015
Siskiyou2140
Mono1822
Del Norte1801
Mariposa812
Plumas760
Modoc450
Trinity280
Sierra60
Alpine40
Unassigned00
Chico
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Oroville
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Paradise
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Chester
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Red Bluff
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Willows
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We're closing out the month of October on a beautiful note weather-wise over northern California with plenty of sunshine and above-average temperatures. Halloween will bring slightly warmer temperatures and more sunshine.
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