United States: Retail sales fall in October
November 14, 2012
In October, retail sales dropped 0.3% over the previous month in nominal terms. The decline contrasted the revised 1.3% expansion recorded in September (previously reported: +1.1% month-on-month) and exceeded market expectations, which had anticipated retail sales falling only 0.1% over the previous month. Eight out of the 13 subcategories composing the index decreased in October, with sales of building materials and at non-store retailers recording the largest losses. Although the October figure was influenced by the effects of Hurricane Sandy, which hit the East Coast of the United States at the end of the month, the exact impact of the storm can not be measured. According to the Census Bureau, "the hurricane had both positive and negative effects on the retail sales data", as some firms reported a drop in sales due to permanent or temporary store closures, while others reported increases due to larger sales of supplies in the areas affected by the storm. Retail sales excluding autos and gas a closely watched subcategory within the retail trade index contracted 0.3% over the previous month (September: +1.0% month-on-month), contrasting market expectations of a 0.2% expansion. In annual terms, retail sales increased 3.8% in October, down from the 5.5% expansion recorded in September. As a result, the trend continues to point down, with annual average growth in retail sales moderating from 5.9% in September to 5.5%. Retail sales are a good indicator for the evolution of consumer spending, a key part of economic growth in the United States, as it accounts for over two thirds of overall GDP.