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U.S. Retail Sales Recover By Climbing 1.6% In September

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(Kitco News) - Gold prices rose after U.S. retail sales recovered from August’s decline, but came in slightly below market consensus, according to the latest data from the U.S. Commerce Department.

U.S. retail sales were up 1.6% in September following an upwardly revised decline of 0.1% in August, which was negatively affected by hurricanes Harvey and Irma. Economists were expecting to see an advance of 1.7% in last month’s headline number.

September’s monthly gain marked the biggest increase in two-and-a-half years, as recovery efforts boosted demand for goods.

Immediately after the latest retail figures were published, December Comex gold rose above $1,300, last trading at $1,302.30, up 0.45% on the day. Earlier in the session, gold prices were slightly lower, but remained close to the $1,300 level.

The strongest parts of the retail report were higher auto and gasoline sales, with receipts surging 3.8% and 5.8%, respectively.

At the same time, retail sales, excluding autos and gasoline, increased 0.5% last month, compared to August’s upwardly revised drop of 0.1%. Economists were expecting to see a 0.4% advance.

Even the report’s control group, which strips out autos, gas, building materials, and food services, was up 0.4%.

The impact of hurricanes is clearly visible in the data from the last couple of months, first dampening the figures in August and now boosting the numbers in September as Americans began replacing their broken vehicles and faced higher gas prices, according to economists.

“Consumers began replacing destroyed motor vehicles in September, a theme that will continue in other parts of the economy in the months to come. Stripping that and other volatile elements out core sales still added a solid 0.4% on the month,” said Royce Mendes, senior economist at CIBC World Markets.

“As expected, the hurricanes delayed some discretionary spending in affected in areas, with the September pickup focused on the necessities including food and clothing,” Mendes added.

The retail report was released at the same time as American inflation data, which disappointed. The U.S. Consumer Price Index (CPI) rose 0.5% in September, after increasing 0.4% in August, the U.S. Labor Department said. However, this was weaker than expected, with consensus forecasts calling for a monthly rise of 0.6%.

And monthly core inflation, which strips out volatile food and energy costs, rose 0.1%, following a 0.2% advance in July. Economists were expecting to see a 0.2% rise in price pressures.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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