WASHINGTON – Plunging gasoline prices fueled solid retail sales in September as consumers took to the roads for fall shopping.
According to the Commerce Department, retail sales overall declined by 0.4 percent during the month, but that lower number was directly attributable to a 13 percent drop gasoline prices and its impact on total sales figures at gas stations.
Excluding service station sales, which plunged a record 9.3 percent, retail sales nationwide rose by a stellar 0.6 percent.
Consumer spending slowed sharply earlier this year as Americans were battered by gasoline prices topping $3 per gallon, high interest rates and a cooling housing market. This slowdown trimmed overall economic growth to a rate of just 2.6 percent in the spring.
Many economists had worried that if the housing slowdown became severe enough it could push the country into a full-blown recession. However, those fears have eased in recent weeks as gasoline pump prices have fallen significantly, putting consumers in a mood to spend on other items.
Still, economists believe that the economy, weighed down by continued declines in housing and a record trade deficit, will grow at a sluggish rate of 2 percent to 2.5 percent in the last half of this year.
For September, sales jumped 1.1 percent at department stores and were up an even larger 3 percent at specialty clothing stores, the biggest increase in this category in 11 months.
The big gains in clothing sales last month have given retailers hope that they will be able to close out the year with a good holiday shopping season.
Auto sales were flat in September following a 0.4 percent drop in August. The nation's automakers have struggled this year with a glut of sport utility vehicles and other gas-guzzling cars.
Excluding auto sales, retail sales were down 0.5 percent, reflecting the big drop in the amount drivers were spending at service stations.
Sales increased by moderate amounts at furniture stores, hardware stores, sporting goods stores and restaurants and bars. Sales fell at grocery stores.
The various changes left retail sales at a seasonally adjusted $366.2 billion in September, down from $367.7 billion in August.
The Associated Press contributed to this report.