Retail Sales Dip Less than Expected
{{#rendered}} {{/rendered}}U.S. retail sales fell a smaller-than-expected 0.1 percent in October on a dip in car purchases, government data showed on Tuesday, while sales grew robustly outside the auto showroom and gasoline station.
Wall Street analysts had forecast retail sales to fall 0.7 percent in the month on weak motor vehicle and parts sales. September's gain was revised to 0.3 percent from a rise of 0.2 percent.
Auto sales were the weak point of the month, falling 3.6 percent in October.
{{#rendered}} {{/rendered}}Excluding autos, retail sales rose 0.9 percent, compared with expectations for a 0.2 percent advance and following a revised 1.4 percent increase in September.
Part of the overall weakness was due to a price effect after gasoline fell sharply from a peak hit after hurricanes Katrina and Rita drove prices above $3 a gallon.
Commerce Department officials said they were not able to estimate how much Hurricane Katrina affected retail sales data, but noted the regions hit by the Gulf Coast storms account for a minimal portion of national retail business.
{{#rendered}} {{/rendered}}The Commerce Department said that October gas station sales were down 0.8 percent, the largest drop since December 2004. Retail sales excluding motor vehicles and gasoline advanced 1.1 percent after growing by 0.8 percent the previous month.
In other evidence of solid underlying retail demand, clothing and clothing accessories store sales jumped 3.1 percent, the largest increase since October 2002 when sales surged 5.2 percent.
Analysts had expected lower energy prices to bolster overall retail sales, although they warn consumer spending remains vulnerable to a renewed surge in the cost of fuel if the U.S. winter proves unusually brutal.
{{#rendered}} {{/rendered}}Wal-Mart Stores Inc (WMT), the world's biggest retailer, said on Monday it expected a good holiday season despite the impact of the hurricanes and high energy prices.
A slowing in the rampant U.S. property market could also challenge spending.
The Federal Reserve has appeared sanguine that economic growth is on a solid path. The U.S. central bank has raised rates in 12 consecutive quarter percentage point steps to 4.0 percent.