{"id":5165,"date":"2025-11-25T16:07:39","date_gmt":"2025-11-25T16:07:39","guid":{"rendered":"https:\/\/www.rbc.com\/en\/economics\/?p=5165"},"modified":"2026-04-02T23:18:44","modified_gmt":"2026-04-02T23:18:44","slug":"us-retail-sales-consumers-ran-out-of-steam-in-september","status":"publish","type":"post","link":"https:\/\/www.rbc.com\/en\/economics\/us-analysis\/us-data-flashes\/us-retail-sales-consumers-ran-out-of-steam-in-september\/","title":{"rendered":"US Retail Sales: Consumers ran out of steam in September"},"content":{"rendered":"\n
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The Bottom Line: <\/strong><\/h2>\n\n\n\n

This morning’s retail sales report is stale, but it gives us a snapshot of how the US consumer fared ahead of the government shutdown. It also tells us that consumers may be on pause now that the pre-tariff pull-forward period has ended. US retail sales rose +0.2% m\/m in September, which was in-line with our own forecast but below consensus of +0.4% m\/m<\/strong>. After stripping out autos, building materials, gasoline, and restaurant spending, the control group measure declined (-0.1% m\/m), suggesting lower-and-middle income consumers may be running out of steam<\/strong> after months of front-loading. <\/p>\n\n\n\n

Here’s what stood out to us in this morning’s report: <\/em><\/p>\n\n\n\n

1) We saw a pullback in trade-exposed sectors that have been rallying since Liberation Day in April. <\/strong>Spending on clothing, sporting goods, and hobbies weakened after tariff front-loading strengthened activity in the summer months. Spending on electronics and appliances also weakened. Furniture sales, on the other hand, held up, but this was a price effect, since spending growth would be roughly flat without the impact of higher furniture prices shown in the September CPI print.<\/p>\n\n\n\n

2)  Non-store retail sales contracted in September (-0.7% m\/m) \u2013 for the first time in nine months.<\/strong><\/strong>Non-store retailers are growing their share of retail sales- about 17% of retail sales and food services spending vs. 12% pre-pandemic. This is a catch-all that encompasses spending on online platforms and increasingly, we know that consumers are purchasing trade-exposed products on these platforms at the cost of retail sales baskets.  While one month does not make a trend, we will be closely watching this sector in the months to come as a good indication of the health of the US consumer.<\/p>\n\n\n\n

3) Spending on food services and drinking places held up in September (+0.7% m\/m) \u2013 suggesting that the upper end of the K<\/strong> in a K-Shaped economy<\/a> is continuing to drive consumer spending<\/strong>. As wealthier households have witnessed a boom in liquid assets and non-labor income becomes increasingly important, we expect services sector spending will remain positive, since this group is less sensitive to tariff price pressures and weaker wage growth. <\/p>\n\n\n\n

The Broader Context: <\/em><\/p>\n\n\n\n