US. retail sales recovered in October, but consumers lowered purchases of household items with large tickets and clothing, which could soften expectations of a strong holiday season.
The Commerce Department said on Friday that retail sales increased by 0.3% last month, lifted through the purchase of motor vehicles and higher gasoline prices, which meant that September had not proposed a 0.3% reduction, which was the first drop in seven months.
Economists surveyed by Reuters had predicted retail sales to rise 0.2% in October. Compared to October last year, retail sales rose 3.1
Excluding cars, gasoline, building materials and food services, retail sales increased 0.3% last month. September data were revised lower to show that core trade sales decreased by 0.1% instead of being unchanged as previously reported. Core retail sales are almost equal to consumer spending for the gross domestic product.
The recovery in the nuclear trade was reported this week, showing stronger inflation to support the Federal Reserve's signal that it will probably not lower interest rates again in the near term. Other reports this month have shown strong growth in work in October and an acceleration in service sector activity.
The data and easing trade tensions between Washington and Beijing have diminished fears of the financial market for a recession. Fed chairman Jerome Powell told lawmakers on Thursday that "the US economy is the star economy today," compared to other advanced economies and "there is no reason that cannot continue."
Last month, the US Federal Reserve lowered its rates for the third time this year, signaling a break in the relief cycle that began in July when it lowered borrowing costs for the first time since 2008.
Consumer spending, accounting for more than two-thirds of the economy , increased by a 2.9% annual interest rate in the third quarter. The economy's engine is driven by the lowest unemployment rate in nearly 50 years and has contributed to disrupting the economy's hit from the White House's 16-month trade war with China, which had led to a fall in investment and a recession in manufacturing.
Car sales increased by 0.5% in October after declining by 1.3% in September. Gas station revenues increased by 1.1%, reflecting higher gasoline prices after falling 0.1% last month. Online and mail order sales increased by 0.9% after winning 0.2% in September.
But sales at electronics and appliance stores decreased by 0.4%. Revenue in building materials stores decreased by 0.5% and sales in clothing stores decreased by 1.0%. Expenditure in furniture stores decreased by 0.9%, the largest decline since December 2018.
Americans also cut spending on restaurants and bars, with sales of 0.3%, the most in almost a year. Spending on hobby, musical instrument and bookstores decreased 0.8%.