U.S. Retail Sales Post Another Firm Increase

Total retail sales & spending at restaurants increased 0.8% during October (4.3% y/y) following a 1.0% September rise, revised from 0.6%. A 0.6% increase had been expected in the Action Economics Forecast Survey. The rise lifted three-month sales growth to 7.2%, its quickest pace since June.

Strength in spending was evident throughout the report. Sales of motor vehicle & parts increased 1.1% (5.4% y/y) after a 1.9% jump. This compared to a 1.5% rise in unit vehicle purchases. Excluding autos, retail sales gained 0.8% (4.0% y/y) after a 0.7% increase. A 0.5% rise had been expected. In the retail control group, which comprises nonauto purchases less gasoline, building materials & restaurants, sales increased 0.8% (4.0% y/y) after a 0.3% rise, revised from 0.1%.

Gasoline service station sales jumped 2.2% (0.8% y/y), strong for the second month with higher prices. Building materials & garden equipment buying gained 1.1% (6.5% y/y) following a 1.8% surge.

Nonstore retailer sales increased 1.5% (12.9% y/y), and continued prior months' strength. Sporting goods, hobby, book & music store sales improved 1.3% (1.7% y/y), about the same as in September. Apparel store sales increased 0.6% (2.3% y/y) following a 0.2% improvement. General merchandise store sales recovered 0.4% (-2.3% y/y) after declining in four of the prior five months. Electronics & appliance stores reported a 0.2% improvement (-4.0% y/y) after shortfalls during four consecutive months. Sales of furniture & home furnishing stores fell 0.9% (+1.7% y/y), the third decline in four months.

In the non-discretionary spending categories, food & beverage store sales improved 0.9% (3.7% y/y), the strongest rise in three months. Health & personal care store sales increased 0.8% (8.3% y/y) following a 0.1% uptick.

Eating out moderated as food service & drinking establishment sales declined 0.7% (+4.3% y/y), and reversed September's 0.7% gain.