2026-10-16
US September Retail Sales Rose 0.77% MoM, Beating Expectations as High Oil Prices Prop Up the Data
The US retail sales growth rate reached 0.77% MoM in September (Q3 2026). Although it cooled significantly compared to the previous 1.24%, it still massively beat the market consensus expectation of 0.3%. This data indicates that nominal consumption momentum is continuing, stabilizing the economic fundamentals. However, the structure behind this stellar surface performance harbors hidden concerns, as real consumption strength was not as robust as expected.
Delving into the key components, the biggest driver of September's retail sales came from gas stations, which surged 6.4% in a single month driven by high oil prices. In addition, food services and furniture sales grew by 1.1% and 1.3%, respectively. However, excluding gasoline, the overall retail sales grew only marginally by 0.2% MoM, and the core Control Group used in GDP calculations rose a mere 0.1% MoM, hitting a recent low.
Addressing the huge disparity in this data, Wall Street analytical institutions point directly to the shadow of inflation. According to a report by TheStreet Pro, high oil prices essentially "accounted for" nearly 70% of the increase in September's retail sales; if inflation factors are taken into consideration, real goods consumption was actually quite weak. This reflects that consumers, when faced with rising energy expenses, are being forced to cut back on other discretionary spending, creating a budget crowding-out effect.
Looking ahead, energy price fluctuations will continue to dominate the superficial growth of retail data in the short term (1-2 months). Especially heading into the year-end shopping season, the high cost of living may further weaken consumer appetite for electronics and apparel. In the medium term (3-6 months), if inflation remains elevated and the high-interest-rate environment persists, the pressure from the depletion of excess savings will accelerate. Investors should be alert to the risk of stagnant core consumption momentum, which could become a stumbling block dragging down a soft landing for the US economy.
US Retail Sales
U.S. Retail Sales Rise in September, Above Forecasts - Haver Analytics