'US Economy Strong' September Retail Sales Exceed Expectations... Unemployment Claims Decrease (Update)

September Retail Sales Increase by 0.4% MoM
Consumption Rises in 10 out of 13 Categories
Unemployment Claims Decrease by 19,000 from Previous Week

U.S. retail sales slightly exceeded market expectations last month. Despite concerns over high interest rates caused by accumulated tightening and cooling employment, there is growing consensus that the U.S. economy is still maintaining a solid growth trend.

According to the U.S. Department of Commerce on the 17th (local time), retail sales in September were recorded at $714.4 billion, up 0.4% from the previous month.

Initially, the market had forecasted that retail sales last month would increase by 0.3% based on Dow Jones estimates, so the actual figure surpassed expectations. In August, retail sales had increased by 0.1%.

Retail sales excluding automobiles and gasoline rose by 0.7%. This significantly exceeded both expert forecasts (0.3%) and the August figure (0.3%).

Out of 13 retail sales categories, 10 showed growth. Consumption increased in variety stores (4%), clothing and accessories stores (1.5%), health and personal care providers (1.1%), grocery stores (1%), and restaurants and bars (1%). Conversely, sales declined in electronics stores (-3.3%), gas stations (-1.6%), and furniture stores (-1.4%).

Retail sales are a core pillar accounting for two-thirds of the U.S. economy. The retail sales data exceeding expectations last month suggests that the U.S. economy continues to maintain a solid growth momentum.

Ian Ringen, Head of U.S. Interest Rate Strategy at BMO Capital Markets, analyzed, "The increase in consumption reinforces investors' perception that the U.S. real economy was strong in September."

The employment data released on the same day also alleviated concerns about a cooling labor market. According to the U.S. Department of Labor, initial jobless claims in the U.S. for the week of October 6?12 decreased by 19,000 from the previous week to 241,000, matching market expectations. Continuing claims, which count those claiming unemployment benefits for at least two weeks, were recorded at 1,867,000 for the week of September 29 to October 5. This exceeded the revised figure for the previous week (1,858,000) but fell short of market forecasts (1,870,000).

As the U.S. economy appears robust, expectations for interest rate cuts have diminished, causing bond yields to rise. The U.S. 10-year Treasury yield, a global bond yield benchmark, rose by 7 basis points (1bp = 0.01 percentage points) from the previous trading day to 4.09%, while the 2-year Treasury yield increased by 5 basis points to around 3.98%.

Following the release of stronger-than-expected economic data, futures prices for the three major indices in the New York stock market are rising before the opening bell. As of 8:58 a.m. on the day, the Dow Jones Industrial Average futures, centered on blue-chip stocks, were up 0.18% from the previous trading day. The S&P 500 futures, focused on large-cap stocks, and the Nasdaq futures, centered on tech stocks, were rising by 0.51% and 1.01%, respectively.