US retail sales rose more-than-expected in October, marking the fastest growth in eight months. It suggests that demand for goods across the board is holding up even as inflation hits its highest level in decades and the economic outlook deteriorates.
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In October, out of 13 categories, nine increased, including auto dealerships, grocery stores and restaurants. Gas station sales increased by 4.1%. This mainly reflects the increase in petrol prices.
The data suggests that the US economy got off to a good start in the fourth quarter, with consumption generally buoyant. But some Fed officials have argued for a slowdown in rate hikes in the coming months, and strong economic data could complicate those discussions.
Bloomberg Economics (BE) economists Eliza Winger and Andrew Husby wrote in a note that strong October retail data will force the Fed to continue hiking rates at upcoming meetings.
Many retailers are overstocking and offering deep discounts to clear up inventory before the all-important holiday season. Sales of clothing stores were unchanged month over month, while sales of department stores decreased by 2.1%.
Sales at appliance and sporting goods stores also fell, suggesting the impact of discounts and weakening demand.
Core sales, which exclude restaurants, auto dealerships, building material stores and gas stations, which are used to calculate gross domestic product (GDP), rose 0.7% from the previous month, the fastest growth high in four months.
See table for detailed statistics.
Original title:US retail sales are up the most in eight months as consumers hold on(Excerpt) October US retail sales rose 1.3%, above estimate (excerpt)
(Adds and updates statistical details and economists’ perspectives)