Retail sales fell for the first time in eight months in October, although the drop was smaller than the expected 0.3%.Retail sales , missing the economists’ expectations of a 0.3% decrease. However, the print marked the first decline in eight months, indicating that the US economy is cooling down after displaying substantial growth over the past months.
Retail Sales Down as Big-Ticket Purchases EaseUS retail sales slid 0.1% in October from a month prior, marking the first decline since March. Economists expected a steeper decline of 0.3%. The negative change comes following a significant increase of 0.9% reported in September, representing the latest sign that the US economy is cooling after displaying impressive resilience throughout most of 2023.Year-over-year, retail sales jumped 2.5% in October, well below the rate of price increases. A notable drop helped the monthly decline in sales of certain big-ticket items. Car sales slipped 1.1% last month, while furniture sales decreased by 2%. On the other hand, sales at restaurants and supermarkets remained strong, climbing by 0.3% and 0.7% in October, respectively. The drop-off in big-ticket purchases was caused by . The Federal Reserve has since March 2022, bringing them to a range of 5.25% to 5.5%. The central bank hasn’t imposed new hikes since July and is not expected to do so for now, particularly after a bigger-than-expected , which was revealed on Tuesday.
What Does New Retail Sales Report Signal?The latest retail sales report is a positive indicator for the Fed policymakers as it demonstrates that spending isn’t accelerating. At the same time, the decline was modest, showing no signs of significant economic weakness.The pullback in spending was confirmed in the most recent , one of the country’s biggest retailers. According to the release, comparable sales fell 4.9% in the quarter that ended October 28, compared to a year earlier.
“Consumers are feeling the weight of multiple economic pressures and discretionary retail has borne the brunt of this weight. Consumers are facing newly emerging headwinds including higher interest rates and the return of student loan payments.”
– said Christina Hennington, Chief Growth Officer of Target.
Recent gross domestic product (GDP) data showed that the US economy . However, economists expect this growth to slow in the year’s final months. Retail sales represent a portion of total consumer outlays, which account for roughly two-thirds of overall economic activity.More By This Author:
