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Retail sales rose 0.4% in September, better than expected; jobless claims dip

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A customer during the grand re-opening of a Century 21 department store in New York, US, on Tuesday, May 16, 2023.

Stephanie Keith | Bloomberg | Getty Images

Consumer spending held up in September, underscoring a resilient economy that is now getting a boost from the Federal Reserve, the Commerce Department reported Thursday.

Retail sales increased a seasonally adjusted 0.4% on the month, up from the unrevised 0.1% gain in August and better than the 0.3% Dow Jones forecast, according to the advanced report.

Excluding autos, sales accelerated 0.5%, better than the forecast for just a 0.1% rise. The numbers are adjusted for seasonal factors but not inflation, which rose 0.2% on the month as measured by the consumer price index.

In other economic news Thursday, initial unemployment claim filings totaled a seasonally adjusted 241,000, a decline of 19,000 and lower than the estimate for 260,000, the Labor Department reported.

Claims declined even following hurricanes Helene and Milton, which tore through the Southeast in recent weeks exacting tens of billions of dollars in damages. Filings in both Florida and North Carolina declined after jumping the previous week, according to unadjusted data.

Stock market futures were higher after the reports while Treasury yields also rose.

Together, the reports show that consumers, who power about two-thirds of all economic activity in the U.S., are still spending and the labor market is holding up after signs of weakening through the summer.

On the retail side, spending grew at miscellaneous store retailers, which showed an increase of 4%, as well as at clothing stores (1.5%) and bars and restaurants (1%). Those increases offset a 1.6% drop at gas stations as fuel prices fell, along with declines at electronics and appliances stores (-3.3%) and furniture and home furnishing businesses (-1.4%).

The data comes from a month where the Fed cut its benchmark borrowing rate by a half percentage point and indicated more moves lower are likely this year and through 2025.

Policymakers have expressed confidence that inflation is on a glide path back to the Fed’s 2% target. However, they have expressed concern that the labor market is softening even with strong September payrolls growth and weekly claims that have stayed fairly in line after jumping due to the storm effects.

This is breaking news. Please check back for updates.

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Economics

Democrats struggle to limit the loss of black voters in Georgia

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The drift of black voters away from the Democratic Party has become a touchstone of the 2024 election. In Georgia, the anxieties of the Kamala Harris campaign are hard to miss. On one night in Atlanta it deployed music moguls to run a “Brothas and Brews” event. Then it released an “opportunity agenda for black men”, promising to give more business loans, protect cryptocurrency and legalise marijuana. To press her closing arguments Ms Harris is sitting down with Charlamagne tha God and other influencers.

Four years ago, Mr. Biden won the state by a razor-thin margin of 11,779 votes. If turnout remains constant this year, a gap like that among black voters would amount to a deficit of 139,000 votes for Ms Harris.

Donald Trump’s allies are pouring it on as early voting opens in Georgia: “For the last three and a half years the Democrats haven’t given a damn about black men unless they’re dead or gay,” Michaelah Montgomery, a black Republican activist, roared onstage at a rally featuring Mr Trump on October 15th. In the packed audience, black men in suits stood and clapped as white women looked on, beaming. Liberals can seem befuddled about why some black voters are turning to Mr Trump but the defectors are often moved by the same issues as other supporters: jobs and reinvesting at home. “You can’t fund other countries if your own backyard is on fire,” says Kiersen Harris, a 22-year-old security guard who plans to vote for Mr Trump.

Mr Biden’s narrow win in Georgia, the first by a Democrat since 1992, was one of the most remarkable results of the 2020 election. It announced that Democratic presidential candidates could again compete in old Dixie after years of mostly fruitless effort. An influential prophet of the turnaround was Stacey Abrams, a Democratic politician who had argued for years that the state was ripe for flipping. Anything less than full investment in Georgia “would amount to strategic malpractice”, she told national Democrats in 2019.

Stacey Abrams, photographed in her back yard in Decatur, Georgia.

Image: Rita Harper

Why was she right? In the two decades to 2020 Georgia’s voting population grew by 1.9m. Nearly half of that growth came from black voters—the largest percentage-point increase in any state’s black electorate. New voters came mostly from New York and Florida, but also the Caribbean and Africa. They bolstered the state’s well-established black elites. Black voters born outside Georgia are now more than twice as likely as black natives to have a college degree. This was a double advantage for Democrats, who increasingly rely on college-educated and minority voters.

Georgia, black people as % of population

By census tract, 2022

Share of total votes cast

by Black voters, 2020, %

Sources: Catalist; OpenStreetMap; Federal Election Commission;
Redistricting Data Hub; The Economist

Georgia, black people as % of population

By census tract, 2022

Share of total votes cast by Black voters, 2020, %

Sources: Catalist; OpenStreetMap; Federal Election Commission;
Redistricting Data Hub; The Economist

Georgia, black people as % of population

Share of total votes cast by black voters,

2020, %

Sources: Catalist; OpenStreetMap; Federal Election Commission;

Redistricting Data Hub; The Economist

Now Mr Biden’s achievement in 2020 lies on a knife’s edge. If Ms Harris does not match Mr Biden’s share of the black vote, she would need to make up votes among white voters, who skew Republican. But whereas Mr Biden won 30% of the white vote in Georgia, polls show Ms Harris up by just one point, at 31%. If that finding proves accurate she can afford to drop just two percentage points with black voters, not the ten shown in current polls.

Read more on America’s election:

Democrats’ struggles with black voters are not new, or confined to Georgia. The party’s presidential candidates won an average of 87.5% of the black vote between 1984 and 2004. Barack Obama changed the equation and won 96% in 2008. “It was a lightning-in-the-bottle moment,” says Terrance Woodbury, a Democratic strategist. Since 2012, however, Democrats have fallen back towards their pre-Obama norm. Black support slipped to 90% by 2020, but a surge in turnout that year—200,000 more black voters in Georgia, in particular—masked the decline. More black votes even at a slightly lower margin delivered Democrats a significant net gain. The alarm for Ms Harris is that polls show her attracting the lowest share of any Democratic nominee in decades. The national Economist/YouGov polls have her at 83.5%, while other polls find her share as low as 78%.

Jobs on their mind

Lower turnout this year could exacerbate Ms Harris’s problem. In 2020 Georgia had two Senate races that attracted national attention and ultimately determined control of the chamber. This time there are no statewide contests to motivate voters disaffected by the presidential candidates. And the black migration that helped Democrats win in 2020 seems to have slowed. Data from L2, an analytics firm, show that of the 187,000 voters who moved to Georgia since 2020 only 24% are black, half the share of those who came before.

Source: YouGov/The Economist

Perhaps the most striking feature of black voters’ evolving outlook is that young black men see less salience in the civil-rights movement than did their parents’ generation. Just 65% of black men under 30 say civil rights are an issue that is very important to them, compared with 84% of those over 65. Auburn Avenue, a black business district that was once the epicentre of Atlanta’s civil-rights movement, is now hollowed out and quiet. “Thinking about racial politics is a luxury,” says a black millennial who works in Georgia politics. “These days young people are more concerned about jobs.”

Ms Abrams reckons this is a messaging problem—fears about the futures of black men and their access to jobs “are inherently civil-rights issues”, she says. She argues that the idea that black voters are moving away from Democrats is “an extrapolation that is not warranted yet”, especially as polling suggests that black women are heavily motivated by Ms Harris.

Ms Abrams and her peers are confident that the Harris campaign can defy the polls. “We saw some similar softness two years ago and we ended up closing that gap,” says Lauren Groh-Wargo, a longtime Georgia operative. Political scientists have shown that tight-knit black communities have strictly enforced political norms, to include voting for Democratic candidates, even as conservatism has become more popular. Trump-curious black voters may yet be persuaded to back Ms Harris by pastors and women in their extended families. If they express support for Mr Trump “out loud in black spaces, research suggests it’s not going unchallenged,” says Andra Gillespie, a political scientist at Emory University. Most undecideds, she thinks, will break in the end for Ms Harris.

Top: Thomas Anderson, who is 36 years old, is not voting this year in part because “our votes don’t matter”. He considers job creation the most important issue.
Bottom: William Owen, a 54-year-old salesman for Frito-Lay, is leaning towards voting for Kamala Harris. He grew up in council housing and sees affordable housing as the election’s most important issue.

Image: Rita Harper

At Fade Away Cutz in South Atlanta Richard Wright, once a candidate for Atlanta mayor and named for the black author, is getting a crisp shave. He and his barber, both middle-aged, are sceptical of the left but say they are voting for Ms Harris. They worry about the younger men who intend to back Mr Trump—and about the fallout from the campaigns’ obsessions with voters who look like them. “If Trump wins, me and you are going to have to move,” Mr Wright tells his barber between treatments, “because black men are going to get blamed.”

This article appeared in the United States section of the print edition under the headline “Getting the drift”

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Economics

Republicans ramp up efforts to court Amish voters in Pennsylvania

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“That’s not a woman’s position,” a straw-hatted Amish man in Lancaster County, Pennsylvania, says wistfully, referring to the presidency. “I’ve got [voter-registration] papers in my pocket right now.” He’s been taking part in a “mud sale”, an Amish charity auction, in a field near the community of Paradise. While the auctioneer shows off his impressive lung capacity, several Republican volunteers mingle among the crowd handing out voter-registration papers and Trump-Vance flags. “I did this four years ago,” one of them says, and “it’s even better now.”

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Economics

Voters won’t thank Kamala Harris for the state of the economy

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Politicians rarely tell voters they are wrong. For Democrats trying to sell America’s economic success, the temptation must be strong. As our special report explains, the country’s economy is one of the strongest in the world. Americans are richer than at the start of President Joe Biden’s term. Yet they struggle to believe it: in weekly polling conducted by YouGov since mid-2021, almost twice as many say the economy is getting worse as say it’s getting better.

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