Reflecting a significant rise in sales from motor vehicle and parts dealers, the Commerce Department announced on Friday that U.S. retail sales saw an increase slightly above expectations for October.
The report indicates that retail sales climbed 0.4% in October, following an upwardly revised 0.8% increase in September. Economists had projected a 0.3% rise, compared to the 0.4% initially reported for the previous month.
"The robust rise in retail sales for October follows a sharply revised increase in spending for September, demonstrating that consumers sustained their positive spending momentum into the start of Q4," commented Nationwide's Chief Economist, Kathy Bostjancic. She further noted, "This data supports our projection of a solid 2% GDP growth for this quarter, although it represents a deceleration from the 2.8% growth observed in Q3."
The slightly better-than-expected growth in retail sales can largely be attributed to a 1.6% jump in sales by motor vehicle and parts dealers in October, after a modest 0.2% increase in September. Excluding auto sales, retail sales crept up by 0.1% in October, following a 1.0% surge in September, with expectations pegged at a 0.3% increase.
This slight increase in non-auto sales owed much to a notable rise in sales at electronics and appliance stores, and a significant uptick at food services and drinking establishments, although these gains were partly counterbalanced by marked declines in other sectors.
Significant reductions were observed in sales at sporting goods, hobby, musical instruments and book stores, as well as health and personal care outlets, furniture and home furnishing stores, and miscellaneous retailers.
Moreover, the department reported that core retail sales, excluding automobiles, gasoline, building materials, and food services, slightly decreased by 0.1% in October, following a robust upward revision to a 1.2% increase in September.
