U.S. retail sales rose at a healthy pace in October, though the gains were likely boosted by one-time factors such as hurricane recovery spending and higher gas prices.
The Commerce Department said Thursday that retail sales rose a seasonally adjusted 0.8 percent last month, following two months of slight declines. Excluding gasoline sales, which were inflated by higher prices, sales climbed a still-solid 0.5 percent.
The figures suggest that consumers are spending at a modest pace, fueled by steady job gains and mild wage increases. Americans lifted their spending over the summer and fall at the fastest six-month pace in four years. Yet business spending on machinery, computers and buildings barely increased in the July-September quarter, leaving consumers shouldering more of the burden of maintaining growth.
Some of October’s spending gain was likely boosted by the impact of Hurricane Florence in September and Hurricane Michael last month. The government said it could not measure the precise impact of the two storms. But auto sales rose 1.1 percent in October, the most since March, as many Americans may have replaced cars destroyed by the hurricanes.
Home improvement and garden store sales increased 1 percent, the most since May, likely boosted by storm-related home repairs and preparations. On Tuesday, Home Depot breezed past all expectations for its most recent quarter and raised its annual profit expectations.
Gasoline station sales jumped 3.5 percent, the most in almost a year, largely because of rising prices at the pump. Yet prices have since declined and will likely continue to do so, as oil prices have fallen sharply this week. The average cost of a gallon of gas was $2.67 on Thursday, down from $2.89 a month earlier.
Nearly all types of retailers reported strong sales gains, a sign of consumer health. Clothing store sales rose 0.5 percent and sales at general merchandise stores, which include big box retailers such as Walmart and Target, also increased 0.5 percent. Electronic and appliance store sales rose 0.7 percent.
Restaurants and bars posted a rare decline for the second month in a row, falling 0.2 percent, following a sharper fall of 1.5 percent in September.
Most analysts forecast economic growth will slow in the final three months of the year, to a roughly 2.5 percent pace, after robust increases of 4.2 percent in the second quarter and 3.5 percent in the third.
© Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.