October Retail Sales Likely to Show a Decline
Retail sales for October, to be published on November 14, are predicted to have dropped 0.2%. Lower gasoline prices accounted largely for the 0.4% decline in retail sales during September. Excluding gasoline, retail sales moved up 0.6% in September following a 0.2% increase in the previous month. The October headline for retail sales will most likely show a decline but the composition will be different compared with September. Auto sales dropped in October to a 16.2 million annual rate after advancing 3.5% to a 16.6 million pace in September. Lower gasoline prices are expected to have trimmed down overall retail sales, but the decline in gasoline sales should be smaller in October vs. a 9.3% plunge in September.
Non-auto retail sales data point to weak retail sales in October. According to the ICSC-UBS survey, the monthly index dropped 0.7% in October following a 0.5% decline in the prior month. Therefore, excluding autos, retail sales should be down again after a 0.5% drop in September. Among other components, the strength in apparel, building materials, furniture and general merchandise seen in September may not be repeated. Retail sales excluding autos and gasoline rose 0.8% in September. Consumer spending in the last three months of the year is expected to have risen by less than the 3.1% annualized gain of the third quarter.
