- Stanley Fischer, Fed Vice Chairman
US retail sales rose less than expected in October due to a surprise decrease in automobile purchases, signalling Americans remained cautious about opening their wallets despite robust job growth and accelerating wages. Consumer spending at retail stores and restaurants climbed just 0.1% from the preceding month to a seasonally adjusted $447.3 billion in October, according to the Commerce Department. Economists, however, had predicted a 0.3% increase after a zero growth in September. The October increase was largely driven by sales at non-store retailers, including online shopping, which increased 1.4% last month. Yet, that was barely enough to compensate for a 0.5% drop in auto sales and motor vehicle parts, along with sluggish sales at gasoline stations. At the same time, core retail sales edged up 0.1% in the reported month.
The US economic growth slowed to a 1.5% annual pace in the third quarter as businesses struggled with an inventory glut and energy companies continued to cut back spending in response to lower oil prices. The retail sales data signalled the economy got off to a pretty slow start to the final trimester, which is something Fed officials will have to consider when they ponder whether to hike rates at their December 15-16 meeting.
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