U.S. Retail Sales (September 2025)

Retail sales growth slows in September 

• The delayed retail sales report showed retail sales rising by 0.2% month-over-month (m/m) in September. Spending growth decelerated from a 0.6% m/m pace seen in each of the prior two months and was slightly weaker than consensus expectations which called for a 0.3% gain. 
• Sales of autos & parts declined by 0.2%, while sales at the gasoline stations rose 2% alongside higher prices at the pump. Sales at building materials and garden equipment & supplies stores edged higher (+0.2% m/m) but were down 2.4% from its year-ago level. 
• Sales in the "control group", which excludes the three volatile components mentioned above (i.e., autos, gasoline and building supplies) were little changed on the month (-0.1%). Significant declines were reported by online retailers (-0.7%), though that comes after a string of solid gains in three months prior.  Sales were also lower at clothing and accessories stores (-0.7%), electronics (-0.5%) and sporting goods (-2.5%). On the other hand, spending rose at miscellaneous store retailers (+2.9%) and furniture stores (+0.6%), with modest gains elsewhere. 
• Sales at bars and restaurants – the only service category in the report – had another strong month, rising by 0.7% and were up 6.7% from the year ago.

Key Implications

• The delayed retail sales report showed some cooling in spending growth in September, following strong gains the two months prior. We will get a more complete picture of consumer spending in Q3 – including spending on services – on Dec 5th once data for consumer spending and income in September are released. At present, our tracking suggests a robust performance, with annualized growth around 3.3%. This marks an acceleration from the 2.5% pace seen in Q2 and represents a notable improvement compared to our earlier forecast.
• Looking ahead to the fourth quarter, spending growth is expected to slow during the holiday season, with an annualized rate of growth of around 1%. Consumer sentiment has weakened in recent months, as households have become more concerned about the softening labor market, impacts from the government shutdown, and lingering inflation worries. Both the Conference Board and University of Michigan measures of consumer confidence have been declining since August.

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