Retail sales unexpectedly rise 0.7% in September
Yahoo Finance's Brian Sozzi and Julie Hyman react to the September retail sales data.
Video Transcript
JULIE HYMAN: And Brian, as we look through these numbers, a couple of things stand out to me. First of all, I know of particular surprise to economists was the uptick in car sales, auto sales, that half a percent gain when analysts have been looking-- economists have been looking over decline, and there was a steep decline last month. So it'll be interesting as we get more data points to see what was behind that.
The other thing I wonder as I look at these numbers is if consumers are heeding the calls to shop early for the holidays or to shop early, basically, for everything. I know you're not. I don't know if you've still not ordered the Barbie for your niece. P.s. I hope she's not watching because it's been well spoiled what she's getting for the holidays. But you know, I do wonder if there's a little bit of pull forward effect.
BRIAN SOZZI: Yeah, she-- I think she's actually is watching, Julie. You know, she's on the Yahoo Finance app right now looking to trade some Bitcoin. So I wish Cassie happy trading today. But look, you know, I think this report was just really focused, as Emily just mentioned, on back to school categories. A lot of stock up I think by households so they don't have to go back out in October and November given everything that's going on with the pandemic. That's just my hot take on that.
Secondarily, if we're looking for red flags in this report, as one should always do when things come in much better than expected, look at the restaurant space. Restaurant sales barely rose in the month, and I'm still going through the quarter out of Domino's yesterday. Domino's warning about staffing challenges. So I think the restaurant sector could have a very bad earnings season as traffic slowed because of concerns about the pandemic.
And then two, a lot of restaurants just couldn't get the staff that they need. And they had a lot of other traffic issue and inflation related challenges. But Julie, overall, I think the market likes this report. I mean, it suggests that consumers have enough financial firepower to overcome inflation, at least for now.
JULIE HYMAN: Yeah, I think we have to be cautious when we try to look for signs for individual companies in this report. I personally have been confounded by that before because we don't always see a one-to-one comparison, particularly if you're talking food and drink establishments, which is such a highly, highly fragmented industry, so many mom and pops there, I don't know-- I mean, yes, maybe it could be a sign for big public companies, but I think we're going to have to wait and see what the various companies come in-- come in and say. Domino's-- maybe that's also further evidence of that.