US. Retail sales rebounded in October, but consumers stopped cutting purchases of household items and high value clothing, which could dampen expectations for a strong holiday season.
The Commerce Department said Friday retail sales rose 0.3% last month, the first drop in seven months.
Economists interviewed by Reuters predicted that retail sales rose 0.2% in October. Compared with October last year, retail sales increased by 3.1%.
Excluding automobiles, gasoline, building materials and food services, retail sales rose 0.3% last month. September data were revised lower to show that retail core sales were down 0.1
The rebound in core retail sales, which added to this week's news, showed a pick-up in inflation as it supported the Federal Reserve's signal that it would likely not lower interest rates again in the short term. Other reports this month have shown solid employment growth in October and an acceleration in services activity.
The data and easing of trade tensions between Washington and Beijing has reduced financial markets fears of a recession. US Federal Reserve Chairman Jerome Powell told lawmakers on Thursday that "the US economy is now the star economy" compared to other advanced economies and "there is no reason that can not be continued." the third time this year, signaling a break in the easing cycle that began in July, when it lowered borrowing costs for the first time since 2008.
Consumer spending, which accounts for more than two-thirds of the economy, rose at an annualized rate of 2.9% in the third quarter. Driven by the lowest unemployment rate in nearly 50 years, the engine of the economy has helped to cushion the impact on the economy of the 16-month White House trade war with China, which has led to a decline in capital spending and a recession in China Manufacturing.
Car sales rose 0.5% in October, after declining 1.3% in September. Revenue at gas stations rose 1.1% on higher gasoline prices, after declining 0.1% in the previous month. Online and mail-order retail sales increased 0.9%, after rising 0.2% in September.
However, sales in electronics and home goods stores decreased by 0.4%. Hardware store sales were down 0.5% and apparel store sales down 1.0%. Furniture store spending declined 0.9%, the largest drop since December 2018.
Americans also reduced spending in restaurants and bars, with sales falling 0.3% most in nearly a year. Spending on hobby, musical instrument and bookstores fell by 0.8%.