No iPhone Bump For September Retail Sales

According to government reports today, retail sales declined 0.1% in September. (Image credit: Getty Images via @daylife)

Even though U.S. shoppers raced out to buy the latest model of the iPhone, new data from the U.S. Census Bureau indicates consumers kept an otherwise-tight grip on their wallets in anticipation of the dampening effect of the government shutdown.

According to September's retail sales report, U.S. retail and food service sales for the month were $425.9 billion, a 0.1% decrease over August levels but a 3.2% increase over spending in September 2012. Excluding auto sales, September retail sales were actually up 0.4%, indicating other retailers may have had better luck luring consumers to the door.

Total sales for the July through September 2013 period were up 4.5% from the same period a year ago, and the July to August 2013 0.2% change ($426.6 billion in sales) was not revised.

'In the details, electronics stores were +0.7%, so there was no sign of any major iPhone effect,' said Jim O'Sullivan, chief economist for High Frequency Economics, in a note Tuesday morning. Apple, of course, sold over 9 million models of the new iPhone 5S and 5C in just three days in September. (Apple said yesterday that it sold 33.8 million iPhones in the fourth fiscal quarter of 2013, a 26% increase over this time last year.)

Aside from motor vehicle and parts sales - which fell 2.2% in September, impacting the overall results - a particular weak point in the report was clothing and accessories sales, which fell 0.5% from August.

Prior to the release, economists polled by Bloomberg forecast no change in purchases and predicted the 0.4% increase excluding auto sales. 'Consumers are spending at a slow pace,' Gus Faucher, a senior economist at PNC Financial Services PNC Financial Services Group, told Bloomberg . 'We have an economy that is expanding, but handicapped by policy mistakes that cause consumers and businesses to be cautious.'

Looking at the broader picture of September's sales report, O'Sullivan called the results consistent with real total goods consumption rate, which he estimated to be rising at a 4.1% annual rate in the third quarter of 2013. 'We estimate total real consumer spending rose at a 1.6% annual rate in Q3, down from a 2.0% pace in the first half of the year. While the weakness in services is negative for Q3 GDP, the pick-up in goods is consistent with the trend starting to improve as the drag from tax hikes fades,' he said.

September's retail sales line up with September's consumer confidence levels, which the privately-owned Conference Board said stands at 79.7, down from 81.8 in August. The Conference Board released October's consumer confidence levels Tuesday morning, as well, and as economists predicted ,there was another decline in sentiment: the Index now stands at 71.2.

In September, Conference Board director of economic indicators Lynn Franco said that consumers were uncertain 'that the momentum can be sustained in the months ahead,' largely due to political issues. This morning, she issued a similar statement, noting that consumer confidence deteriorated considerably in October - which is not a good preview for the October retail sales report.

Tuesday morning also saw the release of September's Producer Price Index, which the Bureau of Labor Statistics said fell 0.1% for finished goods. The BLS said the decline is attributable to prices for finished consumer foods, which fell a full percent in September.

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