Retail sales climbed a better-than-expected 0.3% in October from the prior month, as lower gas prices and a more buoyant job market inspired greater consumer spending.
The Commerce Department on Friday reported retail and food services sales totaled $444.5 billion last month, up 4.1% from the prior-year period. Economists surveyed by Bloomberg had projected a 0.2% increase. The growth is also a rebound from September’s 0.3% drop.
The increase was fueled by greater spending on motor vehicles and parts, as well as higher spending at health and personal care stores and grocery stores. Electronics and appliance store sales slid 1.6%, perhaps due to the launch of Apple’s newest iPhones in September, which led to a significant increase in gadget spending in the prior month.
Gasoline stations sales were 1.5% lower, likely hurt by lower prices. With gas prices under $3 per gallon, Americans are feeling less pain at the pump, and U.S. consumers have billions more to spend this holiday season. But some of those savings are being offset by higher food costs, which account for a bigger chunk of most consumers’ budgets.
There’s also a mixed message about the psychological impact of gas prices swinging notably higher or lower. Some retail executives have hinted lower gas prices can inspire greater spending this holiday season, while other observers say consumers don’t change their spending patterns so drastically, especially those with a higher income that often spend more on discretionary goods.
