The Census Bureau said that retail sales fell 0.3 percent in October, its first decline since June. The decline was led by lower motor vehicle sales, which fell 1.5 percent for the month. Despite reduced auto sales in October, the sector is up 5.0 percent year-over-year. Excluding autos, retail sales figures were flat for the month.
The largest gains for the month came from gasoline stations, with sales rising 1.4 percent. Since October 2011, gas station sales have risen 7.7 percent. Much of this increase was due to higher per gallon prices at the pump. In essence, the gasoline station sales increase offsets lower auto sales, as when the two are excluded from the analysis, retail sales decline 0.3 percent.
Outside of gasoline and motor vehicles, retail sales were mostly mixed. There were increased sales in October observed in food and beverages (up 0.8 percent), sporting goods and hobbies (up 0.5 percent), health and personal care stores (up 0.3 percent), and general merchandisers (up 0.2 percent) businesses. At the same time, declines were seen among the following retailers: building materials (down 1.9 percent), nonstore retailers (down 1.8 percent), electronics and appliances (down 1.0 percent), and furniture and home furnishings (down 0.6 percent).
These figures suggest lackluster growth in retail spending in October. There were some extenuating circumstances that might account for some of this decline, including Hurricane Sandy and a reduction in sales in October for the iPhone 5 (which was introduced in September to strong sales). These factors make the decline harder to interpret.
Yet, it is also clear that there continue to be uncertainties in the marketplace that might keep the public anxious moving forward. For instance, the ability of our policymakers to avert the fiscal cliff leading to a possible recession in early 2013 could definitely impact employment, economic growth, and spending going into the new year.
Chad Moutray is chief economist, National Association of Manufacturers.
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