US Retail Sales Stagnated on Drop in Motor Vehicle Purchases
US retail sales were little changed in October as a decline at auto dealers and weaker gasoline receipts offset stronger spending in other categories.
The value of retail purchases, not adjusted for inflation, was essentially unchanged after a revised 0.1% gain in September, according to a Commerce Department report that was delayed due to the government shutdown. Excluding auto dealers and gasoline service stations, sales increased 0.5%.
Eight out of 13 retail categories posted increases, including solid advances at department stores and online merchants. Motor vehicles fell 1.6%, held down in part by the expiration of federal tax incentives on electric vehicles. Cheaper gasoline prices held down the value of gas station receipts.
So-called control-group sales — which feed into the government’s calculation of goods spending for gross domestic product — climbed 0.8% in October, the most in four months. The measure excludes food services, auto dealers, building materials stores and gasoline stations.
The figures indicate consumer spending picked up steam in the early weeks of the holiday-shopping season as shoppers, many worried about their jobs and frustrated by the high cost of living, sought out deals. Wealthier households have powered much of the recent spending strength, while lower-income Americans have remained more cautious amid tighter budgets.
October is now considered the unofficial start of the holiday-shopping season with major retailers kicking it off with competitive promotions. Black Friday spending in November was also solid, suggesting resilient demand.
Separate figures out Tuesday showed job growth remained sluggish in November and the unemployment rate climbed to 4.6% — the highest since 2021.
The retail data also showed stronger sales at electronics and appliance stores, furniture outlets and sporting goods merchants. Spending at restaurants and bars, the only service-sector category in the retail report, slipped 0.4%.
Economists expect personal spending on goods and services to slow in the final three months of the year after what was likely a solid advance in the third quarter.
Since the retail sales data aren’t adjusted for inflation, a monthly gain could reflect higher prices rather than stronger demand. Also, the figures largely reflect purchases of goods, which comprise roughly a third of overall household spending.
The October retail report was originally due on Nov. 14 but delayed due to the government shutdown.
Source : Bloomberg
