Americans bought millions of Apple Inc.’s iPhone 5 in September, one reason consumer spending bounced back last month.
Retail sales advanced 1.1 percent after rising 1.2 percent in August, the strongest back-to-back showing since late 2010, according to a Commerce Department report today.
Economists had predicted a pop related to the Sept. 21 debut of the iPhone. What they liked even more was that consumers also purchased cars and clothing and went to restaurants.
“The improvement in spending was more than an iPhone 5 sugar-high,” says Millan Mulraine, a senior U.S. strategist for TD Securities in New York.
Receipts at electronics dealers jumped 4.5 percent last month, the most in a year. Non-store retailers, which include online merchants, reported a 1.8 percent increase.
While the overall gain in retail sales got only a 0.1 percentage-point boost from electronics, estimates Credit Suisse economist Jonathan Basile, “it’s about the widespread gains.”
Consumers continue to “plow ahead.”
In short, concerns about a sharp pullback in household spending, the biggest part of the economy, are so far proving to be just that: a concern rather than a reality.
Now it’s up to the job market, housing and stock prices to determine whether the pickup in consumption carries through to the holiday season.