September Retail Sales Rose 0.8%, but Gasoline Did Most of the Work

Retail sales rose 0.8% in September, a bigger gain than economists had expected, but most of the jump came from what Americans paid at the pump. The Associated Press reported Thursday, in a story by Anne D’Innocenzio carried by PBS NewsHour, that sales at gas stations climbed 6.4% and that excluding them, overall retail sales grew only 0.2%. For anyone planning purchases this fall, the headline says shoppers are spending; the detail says they are spending more on fuel.

Here is what the numbers show, why the mix matters for people who buy well-made goods, and what to take from it. Readers should treat the outlook portions as analyst opinion, not a forecast I can vouch for.

What the September report showed

Economists polled by FactSet had expected a 0.3% increase, according to the AP. August was revised up to a 1.3% gain, per the AP and Trading Economics. The figures are not adjusted for inflation. Consumer prices rose 3.7% from a year earlier in September, up from 3.4% in August, the AP noted, and AAA put the average price of regular gasoline at $4.33 a gallon, compared with under $3 before the war began.

Outside the gas pump, the picture was mixed. Furniture and home furnishings stores rose 1.3%, electronics and appliance stores 0.6%, and online retailers 0.3%. Clothing and accessories stores were unchanged. Restaurants, the only services category in the report, rose 1.1%. Trading Economics also listed declines at miscellaneous store retailers (down 3%), building materials and garden equipment (down 0.6%) and sporting goods, books and music (down 0.5%).

Why economists are cautious

The measure economists use to gauge underlying demand, called the control group, rose only 0.1% in September after a 1.2% gain in August, according to Advisor Perspectives and Trading Economics, both summarizing the Census Bureau data. It strips out autos, gasoline, building materials and food service. Advisor Perspectives put it up 4.6% from a year earlier, so the longer trend is still positive even though the month was soft.

Michael Pearce, chief U.S. economist at Oxford Economics, said the large jump in headline sales was almost entirely due to rising gasoline prices, per the AP. He expects spending to lose momentum heading into the holidays as higher prices weigh on shoppers. Natalie Kotlyar of BDO told the AP that part of the gain is simply higher prices and that the report should not be read as broad strength, noting that shoppers are leaning on savings and promotions. The same report mentioned that employers added 29,000 jobs and that the unemployment rate ticked up.

If that reading is right, the holiday season may look less like a surge and more like careful spending at higher prices. That fits the forecast we covered in Holiday Sales Forecast: $1.01 Trillion, With Half the Growth Coming From Higher Prices, and the inflation backdrop in Inflation Hit 3.7% in September, and Gas and Air Fares Did the Heavy Lifting.

What it means for buying well

A budget squeezed by fuel tends to push discretionary buying in two directions. Some people postpone anything that is not needed. Others get pickier, and buy fewer items that last longer. The September data does not prove either is happening, since clothing was flat and furniture was up, but both are plausible readings.

For anyone weighing a work bag, a pair of shoes or a coat this season, a few practical habits help regardless of the headline:

• Count the real cost. Divide the price by the number of times you expect to use the item. A bag carried several days a week for years costs less per use than a cheaper one replaced twice.
• Be wary of promotions as a signal. The AP quoted an analyst saying shoppers are relying on promotions. A discount on something you did not plan to buy is still spending.
• Set a fuel-aware limit. If gas is taking more of your budget than a year ago, decide what you will spend on a purchase before you shop, not after.

It is also worth separating a good month from a good year. Year over year, headline sales were up 6.3% in the Census figures summarized by Advisor Perspectives, but with prices rising 3.7% over the same stretch, a large share of that growth reflects higher prices and not more goods leaving the shelves.

What to watch

Two things will clarify the picture. Next month’s report will show whether the control group recovers from September’s soft reading, and holiday sales data will show whether shoppers keep spending despite fuel costs. Nothing here is financial advice, and I am not predicting where spending goes from here. The only claim I would stand behind is narrow: September’s headline looks stronger than the spending underneath it.

Sources

• AP via PBS NewsHour, Retail sales saw 0.8% bump in September, but big chunk of spending went to paying for gas (Oct. 15, 2026)
• Trading Economics, US Retail Sales Above Expectations on Higher Gas Prices
• Advisor Perspectives, September Retail Sales Better Than Expectations