“No, the iPhone didn’t save the day for the U.S. economy in September,” Jeffry Bartash reports for MarketWatch. “Sales of the new iPhone 5, of course, were astronomical last month. Apple AAPL sold more than 5 million units globally after the latest version went on sale in late September.”
“The launch of iPhone helped deliver a boost to retail sales. They jumped 1.1% in September, above Wall Street’s expectations of a 0.9% gain,” Bartash reports. “The iPhone may have accounted entirely for the upside surprise — and maybe a touch more. The influence of the iPhone is obvious when breaking down spending by category. Sales among retailers of electronics and appliances — chains such as Best Buy — surged 4.5% last month. That’s the biggest increase since October 2011’s gain of 5.3%. Not coincidentally, Apple released the iPhone 4S in October 2011. Retail sales were significantly stronger than expected in that month, too.”
“Yet the bulk of the increase in retail spending in September occurred in other segments, mainly auto dealers, gas stations and grocery stores. These categories accounted for more than 58% of the increase in spending last month, compared to a combined 22% gain for nonstore and electronics retailers. Spending on gas and food, moreover, reflected the high price of fuel in September as well as the rising cost of groceries,” Bartash reports. “These are not positive developments for consumers or the economy overall. When Americans have to spend more on basic necessities, they have less cash for other goods and services. The upshot: higher retail spending in the third quarter — July, August and September — are probably not as positive as they appear. ‘These are good numbers for the third quarter, but there are reasons to be concerned,’ said chief economist Richard Moody of Regions Bank.”
Bartash reports, “Those concerns include slow wage growth, a low savings rate and a sluggish jobs market. Consumer spending, which accounts for than two-thirds of the U.S. economy, is limited by all three. That’s why the economy is expected to expand by a lackluster 1.6% in the third quarter, according to the latest MarketWatch forecast. Growth has tapered off since the first three months of 2012.”
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