By Harriet Torry 

WASHINGTON -- American consumers reined in their spending at restaurants and department stores in September, resulting in the second straight month of weak retail spending.

Sales at retail stores and restaurants rose a seasonally adjusted 0.1% in September, the Commerce Department said Monday. That undershot economists' expectations for a 0.7% month-over-month increase, and matched the rate of spending in August.

"The September figures were unquestionably soft, but there was a lot going on," said Amherst Pierpont economist Stephen Stanley in a note to clients, pointing to payback last month from strong retail spending in the spring and summer, and warm weather that may have dampened back-to-school apparel sales.

September's sales stagnation was led by a 1.8% decline in sales at food services and drinking places, that category's steepest month-over-month drop in nearly two years. Economists said restaurant sales were likely impacted by Hurricane Florence, which made landfall in coastal North Carolina in mid-September.

The Census Bureau said it couldn't isolate the effect of the hurricane, although companies in its survey said the storm "had both positive and negative effects on their sales data while others indicated they were not impacted at all."

While motor-vehicle sales recovered in September after declining in August, sales fell 0.1% in September when excluding motor vehicles, missing economists' expectations for a 0.4% rise and marking the biggest drop since May 2017.

Consumer spending is a key driver of the U.S. economy, representing about two-thirds of economic output. Overall consumer spending was strong in the second quarter, a trend which Monday's report suggests abated toward the close of the third quarter and is a potentially worrying signal for retailers headed into the holiday shopping season.

Still, economists said September's spending was likely hindered by Hurricane Florence, and underlying consumer outlays remained on track.

"The net result still appears to be a fairly strong quarter for consumer spending growth," Jim O'Sullivan, an economist High Frequency Economics Ltd, said in a note to clients.

Sales at department stores fell 0.8%. Sales at nonstore retailers, such as purchases made online or from mail-order catalogs, increased 1.1%.

Retail sales data can be volatile from month to month. Measures of consumer confidence have remained high recently, supported by continued job gains and broader economic growth.

The Federal Reserve closely eyes consumer spending data as a gauge of economic growth, and central bank officials pointed to strong consumer spending as a factor in their decision to raise their benchmark interest rate in September to a range between 2% and 2.25%. They are widely expected to raise the rate again by a quarter percentage point in December.

The Commerce Department's retail sales report can be found at http://www.census.gov/retail/marts/www/marts_current.pdf.

Write to Harriet Torry at harriet.torry@wsj.com

(END) Dow Jones Newswires

October 15, 2018 10:48 ET (14:48 GMT)