Retail sales in October increased from the previous month, reflecting continued resilience among U.S. consumers.
Retail sales rose 0.4% in October. Economists had expected spending to rise 0.3%, according to Bloomberg data. Meanwhile, retail sales for September were revised upward to 0.8% from a previously reported 0.4% increase in the same month, according to Census Bureau data. Most of October’s growth was driven by auto sales, where sales rose 1.6%.
Excluding automobiles and gasoline, sales in October rose just 0.1%, below the consensus estimate of 0.3% growth. The control group in Tuesday’s release, which excludes some volatile categories and factored them into the quarter’s gross domestic product numbers, fell 0.1% in October, below the expected 0.3% increase.
However, sales figures for September were significantly revised in both categories. According to the revised results, sales for both groups increased by 1.2% in September, an upward revision from the previously announced 0.7% increase.
“The underlying weakness in retail sales in October, accompanied by an upward revision in September growth, reflects a decline in consumption growth,” Capital Economics North America economist Bradley Saunders said in a note to clients Friday morning. This suggests that the market remains strong.”
Kathy Bojancic, Nationwide’s chief economist, wrote Friday’s retail sales data showed “consumers maintained positive spending momentum” early in the fourth quarter. This will lead to even more “robust” U.S. economic growth by the end of 2024, Vostjancic wrote.
The report comes as investors continue to closely monitor the health of the U.S. economy and as the Federal Reserve scales back its restrictive interest rate policy. So far, economic data has generally been better than expected, a welcome sign for investors as markets move toward accepting that the Fed may not cut rates as quickly as initially expected.
Read more: How Fed Rate Cuts Affect Bank Accounts, CDs, Loans, and Credit Cards
“The economy is not sending a signal that there is an urgent need to cut rates,” Fed Chair Jerome Powell said in prepared remarks Thursday.
“The strength we’re seeing in the economy right now allows us to approach decisions with care,” Powell added.
Friday’s numbers also cap off a week full of economic news.
Two reports earlier this week indicated that price increases are making little progress toward the Fed’s 2% inflation target for October. The announcement has sparked debate about how much the Fed will cut rates in 2025, and whether the Fed will cut rates again in 2024.
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