United States Retail October 2018

United States

United States: Retail sales growth sharply rebounds in October on surging sales of fuel and motor vehicles

November 15, 2018

Retail sales expanded 0.8% on a seasonally-adjusted month-on-month basis in October, bouncing back markedly from the revised 0.1% contraction logged in September (previously reported: +0.1% month-on-month) and exceeding market expectations of 0.5% growth.

The print was largely driven by a sharp rebound in gasoline station sales (October: +3.5% mom; September: -0.4% mom) and sales of motor vehicles and parts (October: +1.1% mom; September: -0.1% mom). Sales of electronics and appliances also rebounded while building materials sales accelerated, buttressed by rebuilding efforts following Hurricane Florence. Excluding automobiles and gas, retail sales increased a more modest 0.3% in October, up from September’s flat print but slightly below market expectations of 0.4% growth.

As for other retail categories, general merchandise stores and miscellaneous store retailers logged an improving performance in October, while food services and drinking places saw sales fall only marginally after a marked contraction in September. On the negative side, sales growth for non-store retailers—a category which notably includes e-commerce businesses—slowed significantly, while furniture sales contracted slightly. In annual terms, growth in retail sales increased from a revised 4.2% in September (previously reported: +4.7% year-on-year) to 4.6% in October. Annual average retail sales growth inched down to 5.3% in October from 5.4% in September.

Overall, the October data indicates private consumption growth remains solid heading into the fourth quarter and the holiday season—which is traditionally crucial for the retail sector as a whole—though some lingering weaknesses remain. Particularly, the rebound in motor vehicle sales—a staple of durable consumer goods—after months of feeble performance was welcome news in this month’s report, but automobile sales in August to October nevertheless contracted 0.4% (seasonally-adjusted) compared to the preceding three months. In addition, the headline reading was flattered by gasoline sales, which contributed 0.3 percentage points. This is likely to reverse in coming months given the recent drop in oil prices.

Looking ahead, consumption growth should remain buoyant in the near-term, fueled by an extremely strong labor market and rising wage growth. However, headwinds loom over the medium-term, most notably stemming from rate hikes from the Federal Reserve, and growing trade friction with China. Tariffs on USD 250 billion of imports are set to increase from 10% to 25% on 1 January 2019, while President Trump may yet decide to impose tariffs on the remaining USD 257 billion of imports going forward.

United States Private Consumption Forecast


FocusEconomics Consensus Forecast panelists expect private consumption to grow 2.4% in 2019, which is unchanged from last month’s forecast. For 2020, the panel sees private consumption increasing 1.9%.


Author:, Economist

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United States Retail Chart


USA Retail October 2018 0

Note: Month-on-month and year-on-year variation of nominal retail sales in %.
Source: United States Commerce Department.


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