U.S. Retail Sales Beat Estimates as Spending Pace Slows
U.S. retail sales rose more than estimated in October on gains from auto dealers and gas stations, though declines in categories including clothing and furniture stores tempered the advance.
The value of overall sales increased 0.3 per cent after an unrevised 0.3 per cent drop the prior month, Commerce Department figures showed Friday. The median estimate in a Bloomberg survey called for a 0.2 per cent advance.
Sales in the “control group” subset, which some analysts view as a more reliable gauge of underlying consumer demand, increased 0.3 per cent as projected. The measure excludes food services, car dealers, building-materials stores and gasoline stations.
The reading signals consumers remain willing to spend, though at a slower pace than earlier this year, as the robust jobs market and solid wage gains offer reasons for Americans to remain upbeat. Consumers have driven the economy forward in recent quarters, and Friday's data suggest the trend may continue in the fourth quarter.
Federal Reserve Chairman Jerome Powell reiterated this week that the labour market is strong, following an October jobs report that showed payroll gains intact and the jobless rate still near a half-century low. Solid employment would continue to underpin consumer spending.
The report also included some signs that may point to consumers running out of steam, with seven of 13 major categories dropping. Sales at furniture and home furnishing stores fell 0.9% while food service and drinking places decreased 0.3 per cent, both posting the steepest declines of this year.
Control-group sales have increased an annualized 4% over the latest three months compared with a 6.3 per cent rate in the same period through September.
Nonstore retailers, which include online shopping, were a bright spot. They posted a 0.9 per cent gain from the prior month and were up 14.3 per cent from a year earlier, the most of any major group.
Filling-station receipts increased 1.1 per cent, the report showed. The retail figures aren't adjusted for price changes, so sales could reflect changes in gasoline costs, sales, or both.
Spending at automobile dealers climbed 0.5 per cent after decreasing 1.3 per cent in the previous month. That contrasted with industry data from Wards Automotive Group that previously showed auto sales slumped to six-month low in October.
Excluding automobiles and gasoline, retail sales edged up 0.1 per cent after a decline the previous month.
Retail sales estimates in Bloomberg’s survey of economists ranged from a 0.2 per cent decline to a 0.7 per cent gain from the prior month.
The sales data capture don't capture all of household purchases and tend to be volatile because they’re not adjusted for changes in prices. Personal-spending figures will offer a fuller picture of U.S. consumption in data due at the end of the month.
A separate Labor Department report Friday showed the U.S. import price index fell 0.5 per cent in October from the prior month and 3% from a year earlier, the most in three years. Excluding petroleum, the index decreased 0.1 per cent from the prior month.