US retail sales rebound by more than expected in October
By Alexander Bueso
Date: Wednesday 16 Nov 2022
(Sharecast News) - US retail sales grew more quickly than anticipated in October.
According to the US Department of Commerce, in seasonally adjusted terms, retail sales volumes expanded at a month-on-month pace of 1.3% to reach $694.5bn.
Economists had penciled in a rise of 0.9%.
The prior month change was unrevised at flat versus August.
Excluding sales of motor vehicles and parts, retail sales also rose by 1.3% and by a full percentage point when gasoline station sales are also excluded from the equation.
Gasoline station sales were strongest, jumping by 4.1% on the month to reach $64.1bn, while those of motor vehicles and parts dealers were up by 1.3% to $129.5bn.
Furniture and home sales meanwhile rose by 1.1% versus September to reach $12.11bn and those of food services and drinking places by 1.6% to $89.52bn.
Commenting on the latest figures, Ian Shepherdson, chief economist at Pantheon Macroeconomics highlighted strength in auto sales, adding that much bigger increases were still to come.
Taking into account revisions to historical data as well, Shepherdson raised his estimate for the underlying monthly trend in the so-called retail control measure of retail sales to 0.6%, versus 0.3-0.4% previously.
"And so long as people remain willing to run down excess savings in the face of higher borrowing costs and uncertainty over the economic outlook, consumption will stay reasonably strong into next year, partly offsetting weakness elsewhere and keeping the economy as a whole out of recession. But it will still be close."
"We still think the economy will slide into a mild recession in the first half of next year, but our conviction in that call is not as strong as our belief that inflation will come down sharply regardless of what happens to the real economy," chipped in Paul Ashworth, chief North America economist at Capital Economics.
"Much more of this from the US consumer, and we might be in for a soft landing after all."
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