WASHINGTON – Retail sales plunged in September in the wake of the devastating attacks on New York City and Washington, posting their sharpest drop in at least nine years, the government said on Friday.
Retail sales dropped 2.4 percent overall, led by declines in purchases of autos, building supplies and electronics. Excluding the auto sector, sales were off by a smaller 1.6 percent. Commerce said the drops were the largest since the government began compiling its retail data in its current form in February 1992.
The data are likely to fan fears that the U.S. economy, already faltering before the assaults on the World Trade Center and the Pentagon), has tipped into recession. Analysts had expected consumer spending, which makes up two-thirds of economic activity, to have taken a hit as Americans stayed indoors in the wake of the attacks. But the September numbers came in much worse than expected.
Analysts surveyed by Reuters had expected sales to fall by 0.8 percent overall and by 0.6 percent excluding the auto sector.
The Commerce Department also said it tweaked its statistical model slightly to take into account what it called the ``untypical events'' of September. The change was in a portion of the model that would automatically try to smooth out temporary disruptions in the economy, such as hurricanes and floods. Commerce said the change was to ensure the report ''fully included the effects of the attacks.''