September retail sales rise; industrial production lags

Jeannine Aversa

Friday, Oct. 15, 2004 | 9:12 a.m.

WASHINGTON -- Shoppers got their buying groove back last month, propelling sales at the nation's retailers by a strong 1.5 percent, the best showing since March. Activity at factories remained subdued, however, with industrial production rising just 0.1 percent.

The Commerce Department reported today that the sizable gain in retail sales came after shoppers took a bit of a breather in August, causing sales to dip by 0.2 percent. The buying bounceback seen in September offered a fresh sign that consumers -- the lifeblood of the economy -- still have an inclination to spend despite soaring energy prices and a questionable jobs outlook.

September's strength was led by a rebound in sales at automobile dealerships, yet consumers also showed a hearty appetite to spend on a wide variety of goods -- including electronics and appliances, building materials, garden supplies and clothing.

The sales figure for September was much better than the 0.6 percent rise that some economists were forecasting.

The 0.1 percent rise in output at the nation's factories, mines and utilities, however, was below the 0.3 percent gain that economists had been expecting. The Federal Reserve blamed part of the weakness on hurricanes that battered the country last month, curtailing activity in the oil and gas sector, petroleum refining and chemical production.

The Fed reported that September's disappointing performance followed an outright decline of 0.1 percent in industrial output in August, a figure that had originally been reported as a 0.1 percent increase.

The 0.1 percent overall gain in industrial production for September came as a 5.4 percent jump in output at the nation's utilities was tempered by a 0.3 percent drop in manufacturing output and a 2.3 percent decline in mining activity, a category that includes oil and gas production.

In the retail report, excluding sales of automobiles, which can swing widely from month to month, sales at all other merchants rose by a brisk 0.6 percent in September -- the biggest advance since May and up from a 0.2 percent increase in August. The figure excluding automobile sales also was better than the 0.4 percent rise that some economists were expecting.

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