Consumer Spending Falls in September

Consumer spending is typically the main driver of a healthy economy.  For the United States, confidence in consumer spending had been consistent for most of the year despite the global worries.  Latest reports from the Commerce department shows a softening in consumer confidence.  Retail sales dropped this month down 0.3%.  This is the largest decline since February.

Retail sales includes consumer spending in stores, restaurants, and online shopping.  This latest report suggests that consumers may now be more concerned about the on-going trade war with China.  With the newest tariffs on European goods, consumers may feel it even more. 

Many economists believe the drop in consumer spending in retail direct correlates with the drop in vehicle sales.  There was a 0.9% decline on auto spending last month.  Both declines show an overall broader picture of consumer confidence, or lack thereof.

Retail sales numbers have been fluctuating throughout the year.  But this decline was more significant.  Compared to last year, retail sales had increased over 4%.  While we typically see an increase in retail sales as we end the year, this year may not fair as well.  New tariffs are set to be imposed on $160 billion worth of Chinese goods by December 15th.   These new tariffs will affect clothing, toys, electronics, and shoes – many items of which consumers spend on for the holiday season.

Some experts aren’t worried about the slight decline.  Retail sales numbers have been consistently volatile.  Experts cite the low unemployment rates and moderately rising prices.