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driven by car sales plummeting at the end of the country's scrappage
scheme. The Commerce Department said sales slid 1.5 %, not as bad as
expected, but the biggest drop since December last year. Car sales
dropped by 10.4 % but when vehicles were stripped out, retail sales
actually rose by 0. 5 %, better than the 0.2 % which had been
forecast. Consumer spending makes up more than two thirds of US
economic activity. A late Labor Day holiday helped retailers last
month because consumers purchased some items in September that they
would normally have bought in August, analysts said. 'Expected' The
1.5 % drop in September's retail sales followed a 2.2 % rise in
August, which was revised down from an earlier estimate of 2.7 %. That
came as demand for new cars surged in August as buyers took advantage
of the final month of the government's incentives of up to $4 ,500
to trade in old models for more fuel- efficient cars. The Commerce
Department figures showed that sales in furniture stores jumped 1.4
%, reflecting the rebound in the housing industry. Meanwhile, sales
at general merchandise stores such as Wal- Mart and Target, rose 0.9
%. "Certainly the numbers were better than expected," said Scott
Brown, chief economist at Raymond James Associates. "You did see a
big drop in vehicle sales as cash for clunkers expired, which was in
line with expectations."
