Booming car and petrol sales in September pushed the US retail sector to its highest level in more than two years, the Commerce Department said today.
The roaring trade in cars, car parts and fuel helped bring retail sales to life after a year of moribund results and could support stronger GDP growth in the third quarter.
US consumers spent $483.9 billion for the month, seasonally adjusted. This was up 1.6% over August, and also the largest monthly increase since March of 2015, but in line with analyst expectations.
The result was also 4.4% above September of last year.
Sales at car dealers were up 3.6%, also the biggest jump since March of 2015.
Meanwhile, petrol stations had their best month since February of 2013, adding 5.8% in sales, putting them up more than 11% over the same month last year.
Excluding the volatile car and fuel sector, sales rose a more modest 0.5% for the month, up from August's 0.1% gain
Bars and restaurants had a good month, adding 0.8%.
Internet and non-store retailers like Amazon and Jet also continued to expand, rising by 0.5%.
US department store sales however continued to sink, falling 0.4% for the month after losing 0.2% in August.
Meanwhile, soaring fuel prices drove US inflation to an eight-month high in September, with the cost of petrol hitting an eight-year record, the Labor Department said today.
The spike in petrol costs was likely tied to Hurricane Harvey, which idled much of US energy production in late August and created shortages, officials said.
Otherwise, US price pressures otherwise remained tame, suggesting the energy-related jump could be transitory.
Monetary policymakers at the US Federal Reserve remain divided over the dangers of inflation, with some Fed members pointing to persistently weak trends in inflation.
However, market participants widely expect the central bank to raise interest rates in December.
The US consumer price index, which tracks costs for household goods and services, rose 0.5% in September, seasonally adjusted, the largest increase since January.
Analysts had been expecting an increase of 0.6%.
On a 12-month basis, the index rose by 2.2%, surpassing the Fed's 2% target.
Nearly all the increase was due to the rise in the energy index, which jumped 6.1%. US petrol prices soared 13.1%, their largest increase since June of 2009.
Excluding the volatile food and fuel categories, the "core" price index rose only by a token 0.1% for the month.
Year over year, September recorded a 1.7% gain in the core index, the same level now recorded for this measure for five months in a row.
Elsewhere in the September report, clothing for infants and toddlers rose 7%, the largest one-month gain in more than 27 years.
