15 Oct 2009

US retail sales fall

9:23 am on 15 October 2009

Retail sales in the United States have fallen sharply in September, driven by a plunge in car sales as a federal car purchase incentive scheme came to an end.

The Commerce Department said sales slid 1.5% in the month - the biggest drop since December last year.

Analysts say it could have been worse, as a late Labour Day holiday helped retailers because consumers purchased some items in September that they would normally have bought in August.

Consumer spending makes up more than two thirds of US economic activity.

Car sales dropped by 10.4%. But when vehicles are stripped out, retail sales actually rose by 0.5%, better than the 0.2% which had been forecast.

The BBC reports consumer spending makes up more than two thirds of US economic activity.

The 1.5% drop in September's retail sales followed a 2.2% rise in August, which was revised down from an earlier estimate of 2.7%.

Demand for new cars surged in August as buyers took advantage of the final month of government incentives of up to $US4500 to trade in old models for more fuel-efficient cars.

Furniture also up

The Commerce Department figures showed that sales in furniture stores jumped 1.4%, reflecting a rebound in the housing industry.

Sales at general merchandise stores such as Wal-Mart and Target, rose 0.9%.