Oct. retail sales pick up, providing holiday momentum

Retail sales bounced back last month after a disappointing September drop, providing positive consumer-spending momentum heading into the holiday shopping season.

Sales rose 0.3 percent in October after decreasing 0.3 percent the previous month, the Commerce Department said Friday.

Analysts had expected an increase of 0.2 percent.

Lower gas prices helped put consumers in a spending mood, said Jack Kleinhenz, chief economist at the National Retail Federation.

“A boost from plunging gas prices and accelerating job growth, combined with wage and salary gains and rising stock prices are making consumers a bit more willing to spend,” he said.

But falling gas prices also pushed down overall retail sales totals, which include gas purchases.

Sales at gas stations were down 1.5 percent in October from September as the average nationwide cost of a gallon of regular unleaded fell below $3.

Excluding gas purchases, retail sales were up 0.5 percent in October, said Chris Rupkey, chief financial economist at Union Bank.

“Whenever you hear someone talking about how slow growth is out there in the economy, you can always bring up how well actual cash register sales are doing at retailers, how much consumers are actually buying,” he said.

“We believe the stock market gains and the gasoline price tax cut for consumers are going to push retail sales even faster as we head into the holiday season.”

Lindsey Piegza, chief economist at brokerage Sterne Agee, saw it differently.

“Consumers continue to spend, but at a modest level with no sign of further momentum in sight with income growth stubbornly limited,” she said.