(RTTNews) - Retail sales in the U.S. unexpectedly decreased in the month of September, according to a report released by the Commerce Department on Wednesday.
The Commerce Department said retail sales fell by 0.3 percent in September after climbing by an upwardly revised 0.6 percent in August.
The drop came as a surprise to economists, who had expected sales to rise by 0.3 percent compared to the 0.4 percent increase originally reported for the previous month.
The unexpected decrease in retail sales was partly due to a notable pullback in sales by motor vehicle and parts dealers, which slumped by 0.9 percent in September after spiking by 1.9 percent in August.
Excluding the pullback in auto sales, however, retail sales still edged down by 0.1 percent in September after rising by a revised 0.2 percent in August.
Economists had expected ex-auto sales to rise by 0.2 percent compared to the unchanged reading originally reported for the previous month.
Sales by building materials and supplies dealers, department stores, and gas stations showed significant decreases, offsetting a spike in sales by clothing and accessories stores.
Meanwhile, the report said closely watched core retail sales, which exclude autos, gasoline, building materials and food services, were unchanged in September after rising by 0.3 percent in August
"Overall, the retail sales figures support our view that economic growth is slowing," said Michael Pearce, Senior U.S. Economist at Capital Economics.
He added, "We expect a further slowdown to 1.0% annualized in the fourth quarter, ultimately prompting the Fed to cut rates by 25bp one more time at its December meeting."
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