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Economy in Brief

U.S. Retail Sales Increase Firmly
by Tom Moeller  November 15, 2018

Total retail sales rose 0.8% (4.6% y/y) during October following two months of 0.1% decline, revised from slight increases. A 0.5% rise had been expected in the Action Economics Forecast Survey. Excluding motor vehicles and parts, retail sales increased 0.7% after an unrevised 0.1% fall. A 0.5% improvement had been expected. A measure of the underlying pace of retail spending is nonauto sales growth excluding gasoline and building materials. These sales rose 0.3% in October (4.5% y/y), the same as in September.

Patterns amongst sales categories were mostly strong. Motor vehicle and parts dealer sales increased 1.1% (-0.3% y/y), reflecting a 0.7% rise in unit vehicle sales. Building materials & garden equipment stores gained 1.0% (3.6% y/y) following a 0.1% uptick. Purchases at electronics & appliance stores rebounded 0.7% (1.6% y/y) after a 1.5% decline. General merchandise store sales gained 0.5% (3.5% y/y) after stability in September. Sporting goods, hobby shop, book & music store sales also improved 0.5% (-8.5% y/y) following six straight months of sharp decline. Purchases at nonstore retailers rose 0.4% (12.1% y/y) after a 1.3% rise.

Gasoline service station sales jumped 3.5% (16.2% y/y) with the increase in prices. The rise followed a 0.4% easing.

Weakening by 0.3% (+1.2% y/y) were sales of furniture & home furnishings stores, down for two months in the last three.

Sales of nondiscretionary items were mixed last month. Food & beverages store sales gained 0.3% (3.0% y/y) after a 0.4% rise. Health & personal care product store sales held steady (1.8% y/y) after two months of modest decline.

Weakness in sales last month occurred in purchases at restaurant & drinking establishments with a 0.2% fall (+6.2% y/y), off for the third straight month.

The retail sales data can be found in Haver's USECON database. The Action Economics forecast is in the AS1REPNA database.

What Does Labor Market Tightness Tell Us About the End of an Expansion? from the Federal Reserve Bank of Chicago is available here.

Retail Spending (% chg) Oct Sep Aug Oct Y/Y 2017 2016 2015
Total Retail Sales & Food Services 0.8 -0.1 -0.1 4.6 4.3 3.1 2.6
  Excluding Autos 0.7 -0.1 0.1 5.9 4.3 2.7 1.4
Retail Sales 0.9 0.2 -0.1 4.3 4.5 2.8 1.9
  Motor Vehicle & Parts 1.1 -0.1 -0.7 -0.3 4.3 4.6 7.2
 Retail Less Autos 0.8 0.2 0.1 5.8 4.5 2.2 0.4
  Gasoline Stations 3.5 -0.4 1.6 16.2 8.8 -5.7 -17.6
Food Service & Drinking Places Sales -0.2 -1.5 -0.1 6.2 2.7 5.6 8.2
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