Retail sales rose solid 0.8 percent in October
WASHINGTON — U.S. retail sales rose at a solid pace in October, though the gains were boosted by one-time factors such as hurricane recovery spending and higher gas prices.
Retail sales rose a seasonally adjusted 0.8 percent last month, after two months of slight declines, the Commerce Department reported Thursday. Excluding gasoline sales, inflated by higher prices, sales climbed 0.5 percent.
The figures suggest that consumers are pulling back a bit on their spending, which is likely to slow growth in the final three months of the year.
Americans had lifted their spending over the summer and fall at the fastest six-month pace in four years.
Yet business spending on machinery, computers and buildings barely increased in the July-September quarter, leaving consumers shouldering more of the burden of maintaining growth.
Economists saw Thursday’s report as evidence that Americans won’t be able to spend as freely in the fourth quarter as they did in the previous two. Excluding volatile categories such as gas, auto and food services, retail sales rose just 0.3 percent.
“This looks very much like the end of the boost from the tax cuts, and it strengthens our conviction that (economic) growth has peaked,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a research note.
Most analysts forecast economic growth will slow in the final three months of the year, to a roughly 2.5 percent pace, after robust increases of 4.2 percent in the second quarter and 3.5 percent in the third.
Investors also registered their disappointment as they sold off stocks of retail companies, including Walmart, despite the fact that the company reported healthy earnings Thursday.