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US retail sales dip in October, breaking growth streak

EditorNikhilesh Pawar
Published 15/11/2023, 16:30
© Pavlo Gonchar / SOPA Images/Sipa via Reuters Connect
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WASHINGTON - US retail sales saw a slight decline of 0.1% in October, ending a seven-month streak of gains, according to data released Today. The fall was mainly attributed to a 1% drop in auto sales, which represent a significant 20% of total retail sales, combined with lower receipts at gasoline stations as gas prices and demand decreased. However, when excluding autos and gasoline, retail sales actually edged up by a marginal 0.1%.

Despite the overall dip, certain sectors like internet retailers, bars, and restaurants showed resilience with slight sales increases in October. This suggests that consumers are still willing to spend on discretionary items. The figures outperformed initial economist predictions of a 0.2% decrease for the month.

Adding to the mixed economic picture, September's retail sales data was revised to reflect a stronger-than-previously-reported 0.9% increase, compared to the initial estimate of 0.7%. This revision contributes to a cautiously optimistic outlook for the economy as it heads into the critical holiday shopping season, with economists now predicting a robust 4% growth during this period.

Consumer spending is facing headwinds from higher borrowing costs and persistent inflation concerns, which could result in the weakest holiday shopping season in five years. Nonetheless, factors such as rising wages and historically low unemployment levels offer some hope that consumer spending will remain steady enough to help avoid a recession.

In response to the latest retail figures and economic indicators, the stock market showed signs of optimism. Before the opening bell Today, futures indicated that both the Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) were poised for gains.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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