US retail sales jump past forecasts in October

Retail sales volumes in the States increased more quickly than expected last month, amid a jump in demand for motor vehicles and parts in the wake of the hurricanes that struck the Gulf of Mexico.

Total retail sales grew 0.2% on the month to reach $486.6bn, according to the Department of Commerce, and by 0.2% year-on-year.

Furthermore, September's reading was revised up to show a rise of 1.9%, versus a preliminary estimate of a 1.6% gain.

Excluding those of motor vehicles and parts, sales were 0.1% higher on the month in October.

Economists had been expecting a 0.1% rise in total retail sales and a two-tenths of a percentage point increase excluding automobiles.

Sales of motor vehicles jumped by 0.7% month-on-month, alongside similar increases at furniture and electronics and healthcare stores.

Meanwhile, clothing stores and food services outlets saw sales volumes rise by 0.8%. Goods also flew off the shelves at sporting goods stores, where they grew by 1.5%.

However, sales at gasoline stations and building materials stores shrank by 1.2% when compared to the prior month. Sales values at the former were impacted by a drop in prices as a post-hurricane spike was unwound.

Commenting on Wednesday's data, Andrew Hunter at Capital Economics said: "Looking ahead, the fundamentals suggest that consumer spending will gradually slow over the next couple of years. Although consumer confidence remains at multi-year highs, real income growth has slowed quite sharply in recent months and the average pace of monthly employment growth will probably continue to trend lower.

"In the near term, however, the prospects for consumer spending may depend more on the ability of the Republicans in Congress to reach agreement on tax cuts."