U.S. retail sales rose 0.5% in October; excluding autos, sales increased 0.6%, the most since March
November 15, 2011
– Americans spent more on autos, electronics and building supplies in October, pushing retail sales up for a fifth straight month. The report suggests the economy maintained solid growth at the start of the fourth quarter.
Retail sales increased 0.5 percent, the Commerce Department said Tuesday.
Healthy auto sales helped. But even without them, sales rose 0.6 percent — the best showing since March. And when excluding autos and sales at gasoline stations, sales rose 0.7 percent, also the biggest increase since March.
Sales increased even though department stores and specialty clothing store sales fell in October.
The retail sales report is the government's first look each month at consumer spending, which accounts for 70 percent of economic activity.
A rebound in consumer spending was the key reason the economy expanded at an annual rate of 2.5 percent in the July-September quarter, the best quarterly growth in a year.
Stronger economic growth helped calm fears that the economy could slide back into a recession. Still, growth would need to be nearly double the third-quarter rate — consistently — to make a significant dent in unemployment.
Another concern is that the growth came after consumers spent more while earning less, a trend that economists fear can't be sustained.
Without more jobs and higher pay, consumers may be forced to cut back on spending.
The outlook for hiring is mixed. The economy added just 80,000 jobs last month, the fewest in four months. But the government also said employers added more jobs in August and September than it had initially reported and the unemployment rate dipped to 9 percent.
And employers advertised more jobs in September than at any other point in the past three years, a hopeful sign that hiring will pick up.
Americans are buying more cars. The auto industry had its best October in four years. Purchases of SUVs and trucks offset a loss in momentum for car sales.
Sales have rebounded from the earthquake and tsunami in Japan, which disrupted distribution of parts to U.S. factories and made it harder to obtain some popular models.
Retailers hope consumers will keep spending during the all-important holiday shopping period.
The National Retail Federation, the nation's largest retail group, predicts revenues in November and December will rise 2.8 percent this year compared to last year. That would be smaller than last year's 5.2 percent increase. But it would be higher than the average increase over the past 10 years.
© 2019 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.