Sales drop 1.5% as the cash-for-clunkers program ends U.S. retail sales dropped 1.5% in September after the government's cash-for-clunkers subsidy ended, while sales excluding autos rose at a healthy pace, the Commerce Department reported Wednesday. It was the largest decline in seasonally adjusted retail sales since December. September's seasonally adjusted sales of $344.7 billion were down 5.7% compared with the previous September. Through the first nine months of the year, sales were off 8.8% to $3.04 trillion. In September, sales of motor vehicles dropped 10.4%, the largest decline in four years, more than reversing a 7.3% gain in August. For about five weeks in July and August, the government gave up to $4,500 toward a new car to buyers who traded in an older gas guzzler. The subsidy was intended to boost sales and to improve the environment by getting heavily polluting cars off the road. Excluding autos, sales rose 0.5% in September. The numbers are not adjusted for price changes, but are adjusted for trading days, holidays and other seasonal factors. The results were stronger than expected by economists surveyed by MarketWatch, who were forecasting a 2.3% decline in overall sales and a 0.3% gain in sales excluding autos. Sales in August were revised down to a 2.2% gain from 2.7% previously reported. Sales excluding autos in August were revised down to 1% from 1.1%. September sales were higher in most sectors, other than autos. Furniture sales saw the biggest increase in more than two years. Gasoline sales rose 1.1%, somewhat of a surprise considering gas prices were relatively flat. Excluding autos and gasoline, sales rose 0.4%. Despite the big pullback in sales in September, most economists believe consumer spending rose in the third quarter, helping to propel gross domestic product growth to the first gain in a year. Ahead of the report, economists for UBS Securities were forecasting that real consumer spending grew at a 3% annual rate in the quarter, the biggest increase in 10 quarters. Retail spending accounts for about half of consumer outlays; most of the remainder is on services not purchased at retail outlets. Details Motor vehicle sales fell 10.4% after rising 7.3%. Furniture store sales rose 1.4%, the biggest increase since January 2007. Building materials sales dropped 0.2%. Sales at electronics stores were unchanged. Sales at the malls were good. Sales at general merchandise stores rose 0.9%, including a 0.4% rise at department stores. Sales at clothing stores rose 0.5%. Sales at stores catering to leisure-time pursuits, such as hobbies, sports and reading, rose 0.1%. Sales at health and personal care stores rose 0.8%. Sales at food and beverage stores rose 0.7%. Sales at restaurants and bars rose 0.2%. Sales at gasoline stations rose 1.1%. Sales at nonstore retailers, such as catalogs and online stores, fell 0.1%.

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