Economy & Business

U.S. Retail Sales Decline, Fueling Concerns of Economic Slowdown

Holiday shoppers at the King of Prussia Mall in Pennsylvania (Mark Makela/Reuters)

U.S. retail sales declined for the first time in seven months in September, sparking fears of an economic slowdown.

Sales were down 0.3 percent in September as households cut back on spending for automobiles, building materials and online purchases, the Commerce Department announced on Wednesday.

“While this is by no means conclusive evidence that the consumer is wavering…it nonetheless reinforces our ongoing concern that a spending retrenchment will ultimately trigger a more durable slowdown,” head of rates research at BMO Capital Markets Ian Lyngen told CNBC.

Auto sales declined 0.9 percent in September, and receipts were down 0.7 percent at gas stations, possibly a reflection of low gasoline prices.

“The drop back in retail sales in September was partly driven by a price-related fall back in gasoline prices,” said Michael Pearce, a senior U.S. economist at Capital Economics, “but the fact that underlying control group retail sales were unchanged provides another clear sign that consumption growth is slowing.”

President Trump has frequently touted the health of the U.S. economy as the central success of his administration, emphasizing strong job numbers and other positive indicators in the midst of ongoing trade battles with China. Trump has imposed tariffs on a number of goods imported from China that are difficult to obtain from other markets, while in return China has stopped importing U.S. agricultural products.

On Monday, China announced its desire for additional negotiations regarding a trade agreement with the U.S. before a final commitment. The deal purportedly includes $40 to $50 billion in Chinese purchases of American agricultural products, as well as protections on American intellectual property.

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