Retail sales in the United States came in stronger than expected in September, according to government data released on Tuesday (Oct 17), supported partly by sales in the auto sector and at petrol stations.

Sales rose 0.7 per cent last month in the world’s biggest economy, reaching US$704.9 billion, while the pace of growth in August was revised upwards to 0.8 per cent, the Commerce Department on Tuesday.

While the latest figure marks a slight slowdown, it remains hotter than analysts expected.

US consumption has shown resilience despite higher interest rates, after the central bank embarked on an aggressive campaign to lower inflation last year.

The Federal Reserve lifted the benchmark lending rate rapidly, increasing the cost of borrowing and lowering demand by making it pricier to get funds for big-ticket purchases or business expansion.

In September, retail sales excluding motor vehicles and parts, as well as petrol stations, ticked up 0.6 per cent.

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Sales at motor vehicle dealers rose 1.1 per cent from August, while that at petrol stations picked up 0.9 per cent.

Analysts have been warning that although the US economy has remained strong in the face of elevated interest rates, it is a matter of time before tighter credit conditions bite.

A key factor is the job market, a “key underpinning of the consumer,” said economist Oren Klachkin at Nationwide.

“As long as the job market stays solid and wages continue to rise, we should in turn expect retail sales to be pretty strong, to post positive month-on-month gain,” he said. AFP.