After the government's cash-for-clunkers subsidy ended U.S. retail sales dropped 1.5% in September. Meanwhile sales excluding autos rose at a healthy pace, the Commerce Department reported Wednesday.
It was the largest decline in seasonally adjusted retail sales since December.
September's seasonally adjusted sales of $344.7 billion were down 5.7% compared with the previous September. Through the first nine months of the year, sales were off 8.8% to $3.04 trillion.
In September, sales of motor vehicles dropped 10.4%, the largest decline in four years, more than reversing a 7.3% gain in August. For about five weeks in July and August, the government provided up to $4,500 toward a new car to buyers who traded in an older gas guzzler, MarketWatch reports.
It was also reported, sales excluding autos and auto parts rose 0.5%, compared to a 1.1% increase in August. Economists expected a gain of 0.2% in September sales, excluding auto purchases.
Total retail sales rallied in August as auto sales surged on the Cash for Clunkers program, which paid buyers up to $4,500 for their used cars when they purchased more fuel-efficient models. But auto sales fell 40% in September from the previous month after the popular program ended Aug. 24, CNNMoney.com reports.
In the meantime, analysts had expected increases at general merchandise stores following reports last week from the nationwide retailers that sales grew in September at stores open at least a year compared with activity in September 2008. It marked the first year-over-year rise in sales after a year of declines, according to data from the International Council of Shopping Centers and Goldman Sachs.
A late Labor Day and delayed school openings helped retailers last month because consumers purchased some items in September that they would normally have bought in August.
J.C. Penney Co., Macy's Inc. and Target Corp. reported that sales at their stores open at least a year fell, but not as much as analysts expected, The Associated Press reports.
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