Retail sales rose for the fifth straight month in September, with gains in almost every sales category.
Total retail sales rose by 1.9%, well ahead of the 0.7% gain expected and following a 0.6% gain in August and a 1.1% rise in July.
Motor vehicle sales jumped by 3.6% in September after 0.7% gain in August, while industry data had suggested a smaller increase.
Retail sales excluding motor vehicles were still up 1.5% in September, a much larger increase than the 0.4% gain expected. Sales were up in every category except for a 1.6% decline at electronics and appliances stores and flat food store sales.
Clothing stores sales surged by 11.0% in September, reflecting late in-person school openings in many districts.
Furniture store sales rose by 0.5% and building materials sales rose by 0.6%, still reflecting strong home sales.
Sales at restaurants and bars rose by 2.1% in September and gasoline station sales increased by 1.5%.
The closely watched control group – total sales excluding motor vehicles, gasoline, building materials, and food services – rose by 1.5% after a 0.4% decrease in August and a 1.3% gain in July. This data feed into GDP calculations and represent a partial third quarter recovery of consumption after the massive decline in the second quarter.
Released later Friday, industrial production posted a surprise decline in September, led by a plunge in utilities production and a small decline in manufacturing production.
Industrial production fell by 0.6%, compared with the 0.6% increase expected. Utilities production plunged by 5.6% with electricity production down 7.3% due to cooler weather trimming air conditioning usage more than normal in the month. A 2.9% increase in natural gas production provided some offset.
Manufacturing production fell by 0.3%, well below the 0.8% gain expected. Motor vehicle production fell by 4.0%, a second straight decline after large increases in the previous three months on plant re-openings.
Excluding motor vehicles, overall industrial production would have been down 0.4% and manufacturing production would have been flat.
Mining production rebounded by 1.7% after falling by 2.4% in August.
Released later in the morning, the University of Michigan’s sentiment index rose to 81.2 in early-October from 80.4 in September.
Michigan noted increased concern about the near-term economy due to rising COVID-19 cases and the lack of further stimulus. As a result, the current conditions index fell to 84.9 from 87.8.
However, the economic outlook for the next year improved, lifting the expectations reading to 78.8 from 75.6.
Released at the same time, business inventories rose by 0.3% in August, as expected, with retail inventories revised down to a 0.4% gain from the 0.8% increase in the advance estimate. Wholesale inventories were already reported up 0.4%, while factory inventories were flat
Business sales rose by 0.6% after July’s 3.4% increases. There was a sharp increase in wholesale sales and smaller gains for retail trade sales and factory shipments.