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New York - Americans may have slowed their spending in September after splurging in the month before during the busy back-to-school shopping season. But most importantly, they are still spending.
September sales rose 3.9 percent - a slowdown from the 6-percent rise in August - as 22 retailers like Macy's and Costco reported mixed results, according to the International Council of Shopping Centers. Still, given the economic and political uncertainty that weighs on many Americans right now, analysts say the results are an encouraging sign for stores as they head into what's traditionally the busiest shopping period of the year in November and December.
"This should set up to be a good holiday season," said Ken Perkins, president of Retail Metrics LLC, a research firm.
Retailers' monthly sales figures are based on revenue at stores opened at least a year. That measure, which is considered to be an indicator of a retailer's health because it excludes results from stores recently opened or closed, offers insights into how Americans are spending during the slow economic recovery.
But only a handful of merchants representing about 13 percent of the $2.4 trillion U.S. retail industry report monthly revenue. And that list is dwindling: Target Corp. on Thursday said that it will no longer report monthly figures starting next year.
Target was among those retailers reporting results that fell short of analyst expectations. The discounter said its sales gain of 2.1 percent was slightly below analysts' expectations as shoppers picked up back-to-school items and groceries. Department-store chain Macy's also posted a 2.5 percent increase last month that was below the gain of 3.3 percent analysts polled by Thomson Reuters had expected. Meanwhile, Costco Wholesale's 5.7 percent gain put it among the merchants that posted results that beat Wall Street estimates.
September's results offer hope for retailers as they head into the winter holiday shopping season, a two-month period in which they can make up to 40 percent of their annual revenue. It's the latest sign that consumers are feeling a little better about the economy. That's important because consumer spending accounts for 70 percent of economic activity.
Confidence is at a seven-month high as people are feeling better about rising home prices and a rebounding stock market. Still job growth remains weak and prices for everything from food to gas are higher. On top of that, there's a worry that the U.S. economy will fall into another recession next year if tax increases and deep government spending cuts take effect with Congress reaching a budget deal.