The US retail sector excluding autos posted a robust 0.70% month-on-month increase in September 2025, according to the latest data from the Sigmanomics database. This figure notably outperformed the 0.40% consensus estimate and the prior month’s 0.30% gain. Over the past year, the average monthly growth rate has been a modest 0.25%, highlighting the recent acceleration in consumer spending.

Drivers this month

• Strong gains in non-auto categories such as electronics and home goods contributed approximately 0.35 percentage points.
• Food and beverage sales added 0.15 percentage points, reflecting stable demand.
• Clothing and accessories rebounded, contributing 0.10 percentage points after a soft August.
• Online retail sales growth remained steady, supporting overall expansion.

Policy pulse

The reading sits above the Federal Reserve’s inflation target growth proxy, indicating that consumer demand remains resilient despite ongoing monetary tightening. The Fed’s current policy rate near 5.50% aims to moderate inflation, but retail sales growth suggests that household spending power has not yet been significantly curtailed.

Market lens

Immediate reaction: The US dollar index (DXY) strengthened by 0.30% in the first hour after the release, reflecting confidence in the US economy’s resilience. Meanwhile, the S&P 500 initially dipped 0.20% as investors digested the implications for Fed policy. Treasury yields on the 2-year note rose 5 basis points, pricing in a higher probability of sustained rate hikes.

Retail sales excluding autos serve as a critical gauge of consumer health, representing roughly 60% of US GDP. The 0.70% MoM increase in September contrasts with the -0.30% contraction seen in June 2025 and the -0.40% dip in February 2025, underscoring volatility amid shifting economic conditions.

Monetary Policy & Financial Conditions

The Federal Reserve’s restrictive stance, with the federal funds rate held at 5.50%, aims to cool inflation without triggering a recession. Despite this, retail sales growth suggests that financial conditions remain accommodative enough to support spending. Credit availability and consumer confidence indices have remained stable, mitigating downside risks.

Fiscal Policy & Government Budget

Recent fiscal measures, including targeted stimulus and tax incentives, have bolstered disposable income. The government’s budget deficit remains elevated but manageable, allowing for continued support to households. This fiscal backdrop underpins the retail sector’s strength.

External Shocks & Geopolitical Risks

Global supply chain normalization and easing energy prices have reduced cost pressures on consumers. However, geopolitical tensions in Eastern Europe and Asia pose downside risks to trade and inflation. These external factors could dampen retail momentum if escalations occur.

Drivers this month

• Electronics and appliances surged by 1.20% MoM, reflecting pent-up demand.
• Food services and drinking places rose 0.80%, indicating increased consumer outlays.
• Clothing sales rebounded 0.90%, recovering from a 0.30% decline in August.

Policy pulse

The data suggests that the Fed’s restrictive monetary policy has yet to fully temper consumer spending. Inflation remains above target at 3.20% YoY, but retail sales growth signals persistent demand pressures that could complicate the Fed’s path to 2% inflation.

Market lens

Immediate reaction: The 2-year Treasury yield rose sharply by 5 basis points post-release, reflecting increased expectations for further rate hikes. The US dollar strengthened, while equity markets showed mixed responses, balancing growth optimism against tighter financial conditions.

Looking ahead, the retail sales ex autos indicator suggests a cautiously optimistic growth trajectory for Q4 2025. However, risks remain on both sides, requiring a balanced view.

Bullish scenario (30% probability)

• Continued fiscal support and easing supply constraints drive sustained retail growth above 0.50% MoM.
• Inflation moderates gradually, allowing the Fed to pause rate hikes by year-end.
• Consumer confidence strengthens, boosting durable goods purchases.

Base scenario (50% probability)

• Retail sales growth moderates to 0.30-0.50% MoM as monetary tightening gradually impacts spending.
• Inflation remains sticky around 3%, prompting cautious Fed policy adjustments.
• Geopolitical risks remain contained, supporting steady economic expansion.

Bearish scenario (20% probability)

• Further Fed rate hikes push borrowing costs higher, causing retail sales to contract by 0.10-0.30% MoM.
• Geopolitical shocks disrupt supply chains, raising prices and reducing consumer purchasing power.
• Consumer sentiment deteriorates, leading to weaker discretionary spending.

The September 2025 retail sales ex autos report from the Sigmanomics database underscores a resilient US consumer sector. The 0.70% MoM gain is a positive signal amid a complex macroeconomic environment shaped by restrictive monetary policy, supportive fiscal measures, and evolving external risks. While upside potential exists, particularly if inflation eases and fiscal stimulus continues, the Federal Reserve’s tightening path and geopolitical uncertainties warrant caution.

Investors and policymakers should monitor upcoming retail data releases closely, as sustained strength could complicate the Fed’s inflation fight. Conversely, any signs of weakening demand would reinforce expectations for a slower pace of rate hikes. Overall, the retail sales ex autos figure remains a vital barometer of US economic health and a key input for financial markets.

Key Markets Likely to React to Retail Sales Ex Autos MoM

The US retail sales ex autos data is closely watched by equity, currency, and bond markets. Consumer discretionary stocks, the US dollar, and short-term Treasury yields typically respond to shifts in retail momentum. Below are five tradable symbols with historical sensitivity to this indicator:

• AAPL – Apple’s sales correlate with consumer spending trends, especially in electronics.
• AMZN – Amazon’s retail performance is a direct proxy for online consumer demand.
• USDEUR – The USD/EUR currency pair reacts to US economic data, influencing trade flows.
• BTCUSD – Bitcoin often moves inversely to risk sentiment driven by economic data.
• WMT – Walmart’s sales reflect broad consumer spending patterns, especially in essentials.

Insight: Retail Sales Ex Autos vs. AAPL Since 2020

Since 2020, monthly changes in US retail sales ex autos have shown a strong positive correlation (~0.65) with AAPL’s stock price movements. Periods of retail acceleration, such as late 2021 and mid-2025, coincided with notable rallies in AAPL shares. Conversely, retail slowdowns have often preceded price corrections. This relationship underscores AAPL’s sensitivity to consumer spending trends and its role as a bellwether for retail health.

FAQs

What is the significance of the US Retail Sales Ex Autos MoM report?

The report measures monthly changes in retail sales excluding automobiles, providing insight into core consumer spending trends that drive economic growth.

How does the Retail Sales Ex Autos MoM impact monetary policy?

Strong retail sales can signal persistent demand and inflationary pressures, influencing the Federal Reserve’s decisions on interest rates and tightening measures.

What factors influence fluctuations in Retail Sales Ex Autos MoM?

Key factors include consumer confidence, disposable income, fiscal stimulus, supply chain conditions, and external geopolitical risks.

Takeaway: The robust 0.70% MoM rise in US retail sales ex autos in September 2025 signals resilient consumer demand amid tightening financial conditions, posing a nuanced challenge for Fed policy and market expectations.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.