By Sabrina Escobar
The first glimpse of official consumer spending data in two months is in: retail sales rose at a slower pace than expected in September.
Retail sales rose at a monthly pace of 0.2% from August to September. Economists polled by FactSet were expecting a 0.4% increase. Sales increased 0.6% in August from July.
This is breaking news. Check back soon for more updates and read a preview of the retail sales report below.
Markets will get a glimpse of official consumer spending data for the first time in two months Tuesday morning when the Census Bureau releases the September retail sales report.
The report was delayed because of the 43-day government shutdown, which ended mid-November. While the September data may be a bit "stale" this close to the end of the year, the results will nonetheless provide insights about the health of U.S. consumers heading into the all-important holiday season.
Economists expect the report will reflect recent comments made by the country's largest retailers: Spending remains resilient, but growth is slowing -- particularly for discretionary purchases -- as economic uncertainty weighs on consumers.
"With wage growth slowing and tariffs now fully in place, we think higher prices will start weigh on consumption," wrote Michael Reid, senior U.S. economist at RBC Economics.
Bloomberg consensus estimates call for a 0.4% increase from August, slowing slightly from the prior month's 0.6% increase.
A rush to purchase electric vehicles before the $7,500 tax credit expired at the end of the month may be the diver behind the headline increase, noted Bill Adams, chief economist for Comerica Bank. But underlying retail sales likely grew at a slower pace, he added.
Last week, many big-box retailers reported fiscal third-quarter earnings. The results themselves were a mixed bag, with some topping analysts' earnings expectations and others falling short. But given the dearth of official spending data, investors were more eager to hear what they had to say about the consumer economy.
The main takeaways are that Americans are selective in their spending and are prioritizing value as concerns over inflation and affordability mount among lower- and middle-income consumers.
Home Deport CEO Ted Decker said on Tuesday that macroeconomic pressures had hampered the home improvement market's expected recovery in the third quarter.
"We were expecting interest rates and mortgage rates to come down, which they did, that would have been some assistance to housing," Decker said. "But we really just saw ongoing consumer uncertainty and pressure in housing that are disproportionately impacting home improvement demand."
Target's Chief Commercial Officer Rick Gomez followed up on Wednesday saying that consumers remained cautious approaching the holiday season, with consumer sentiment ranging at three-year lows.
"Guests are choiceful, stretching budgets and prioritizing value," he said. "They're spending where it matters most, especially in food, essentials, and beauty, while looking for trend-right deals in discretionary categories."
Retailers also flagged that spending had been slightly affected by the closure of the federal government -- a fact that won't be reflected until October and November's data. The Census Bureau has yet to set a date for both releases.
Most official government releases have been pushed back or canceled altogether -- a fact that has complicated matters for investors, economists, and policymakers.
The September data will likely provide Federal Reserve officials additional information as they decide whether to cut interest rates or not at their meeting in December. But unfortunately for the Fed, the timelier releases won't come until after, Reid added.
Write to Sabrina Escobar at sabrina.escobar@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
November 25, 2025 08:38 ET (13:38 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.