Economists, on average, had expected a 0.8 percent drop for September. For the entire third quarter, retail sales fell 6.9 percent on an annualised basis. That will be a considerable drag on the government's estimates of third-quarter gross domestic product, to be released later this month. Economists had forecast an annualised drop of about 1 percent in US GDP before yesterday's release. In its latest memo on the subject, dated October 8, the National Bureau of Economic Research, the widely recognised arbiter of US business cycles, said economic data remained inconclusive as to whether the US had slipped into recession.
Economists expect consumer confidence to be a critical factor in determining that.
The University of Michigan said yesterday that its consumer confidence index, based on a preliminary survey of about 250 US households, unexpectedly rose in October, to 83.4 from 81.8 in September, in the face of mounting job cuts and uncertainty. Economists had expected, on average, a five-point drop. That surprising improvement has been corroborated by other surveys conducted since the attacks. Separately, the Labor Department on Friday said wholesale prices in the US rose 0.4 per cent for the second consecutive month in September. All monthly figures are seasonally adjusted.