U.S. October Retail Sales Bode Well for the Final Quarter of 2011
Economics / US Economy Nov 16, 2011 - 01:31 AM GMTRetail sales rose 0.5% in October after a 1.1% increase in September. Unit auto sales matter in the computation of GDP, not the retail sales tally. Unit auto sales rose to 13.26 million units in October from 13.1 million units in September. These numbers imply that auto sales will make a positive contribution to spending in October. Gasoline sales are largely influenced by the price of gasoline; the 0.4% drop in gasoline sales in October reflects lower prices. Gasoline prices show a downward trend in the early days of November, implying a possible drop of the price index in November.
Excluding gasoline and autos, retail sales moved up 0.7% in October vs. a 0.5% gain in the prior month, which is a big plus for consumer spending in October and the fourth quarter. Although sales of apparel (-0.7%) and furniture (-0.7%) fell in October, other categories posted gains to lift the total. The bottom line is that the headline and sub-categories of retail spending indicate a good start for consumer spending in the fourth quarter.
Asha Bangalore — Senior Vice President and Economist
http://www.northerntrust.com
Asha Bangalore is Vice President and Economist at The Northern Trust Company, Chicago. Prior to joining the bank in 1994, she was Consultant to savings and loan institutions and commercial banks at Financial & Economic Strategies Corporation, Chicago.
Copyright © 2011 Asha Bangalore
The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.
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