By Kasra Kangarloo

WASHINGTON (MNI) – Friday’s U.S. retail sales figure for September
is expected to show only modest improvement, similar to the past couple
months and reflecting the recent moderation in the economic recovery.

According to a survey of economists by Market News International,
September retail sales are expected to rise 0.5% and sales
ex-automobiles are expected to rise 0.4%. This would make for the third
straight monthly rise in the headline figure, and the largest gain since
March.

Scott Brown, economist at Raymond James, credited improved auto
sales and delayed back-to-school shopping for the expected increase, and
added that the recent trend, though positive, “is not especially strong
at this point.”

Retail sales have been relatively depressed through most of the
second and third quarter, as consumption has been limited to replacement
and bargain spending. The Fed’s Beige Book released on September 8th
highlighted this trend, as reported by the majority of regional Federal
Reserve banks.

The trend reflects the broader state of the U.S. economy, which has
been stifled by consistently high unemployment and a weak housing
market.

New home sales have been near record lows since the home buyers’
tax credit expired, and the unemployment rate has remained just under
10% throughout the year.

Relevant data for the month of September showed a mixed
performance, as consumer confidence data from the University of Michigan
and ICSC chain store sales data ticked downward. In addition, the
Conference Board reported sharp decline in their confidence index,
though buying plans for autos were little changed and plans for major
appliances rebounded.

One bright spot was domestic vehicles sales, which showed
substantial improvement. Sales rose to an 8.82 million annual rate in
September from the 8.66 million rate posted in August.

Gas prices also rose over the month, according to data from the
Energy Information Administration.

A research note by economists at MF Global referred to the
improvements in auto sales and gas prices as evidence for a strong
retail sales in September, though consistent with a lower rate of
improvement than the second quarter.

Retail sales data for September will be released by the Department
of Commerce 08:30 a.m. ET Friday.

— Kasra Kangarloo is a reporter for Need to Know News in Washington

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: M$U$$$,MAUDS$]