Weak U.S. retail sales heighten fears over economy

WASHINGTON (Reuters) – U.S. retail sales fell for the first time in seven months in September, suggesting that manufacturing-led weakness could be spreading to the broader economy, keeping the door open for the Federal Reserve to cut interest rates again later this month.

The signs of a deceleration in consumer spending reported by the Commerce Department on Wednesday came on the heels of reports this month showing a moderation in job growth and services sector activity in September.

The economy is being hamstrung by a 15-month trade war between the United States and China, which has soured business sentiment, leading to a decline in capital expenditure and a recession in manufacturing.

“Weaker retail numbers provide further evidence that weakness in the manufacturing sector is spilling over into other areas of the economy,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan.

Retail sales dropped 0.3% last month as households cut back spending on motor vehicles, building materials, hobbies and online purchases. That was the first drop since February.

Article URL : https://www.reuters.com/article/us-usa-economy-retail/weak-u-s-retail-sales-heighten-fears-over-economy-idUSKBN1WV1NG?il=0

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