U.S. retail sector sales slowing down

United States retail sales rose less than expected in October amid a surprise decline in automobile purchases, suggesting a slowdown in consumer spending that could temper expectations of a strong pickup in fourth-quarter economic growth.

Overall retail sales in the US grew 0.1% in October, matching Septembers 0.1% increase, which was left unchanged, and missing estimates of closer to 0.3%. But retail sales in September were revised from a 0.1% gain to unchanged.

Seven of 13 major retail categories showed gains last month, led by building-material stores, restaurants and non- store merchants, which include Internet sales, according to the report from the Commerce Department. Receipts at building materials and garden equipment stores rose 0.9 percent, while sales at furniture stores increased 0.4 percent. Core prices, which exclude volatile food and energy costs, have risen a mere 0.1 percent over the past year.

Excluding motor vehicles, sales were up 0.2 per cent in October.

Other data on Friday showed a second straight monthly decline in producer prices as the cost of services fell.

Sales at US retailers rose less than forecast in October as consumers pocketed the money saved after fueling up their cars. Producer prices fell 0.4 percent last month alone. Clothiers hired 19,500 workers in October ahead of the shopping rush, the government said last week.

Still, not all of the retail-related hiring will appear at stores and showrooms.

Retailers are mixed in their forecasts for what to expect, with department store Macy’s this week cutting its earnings forecast for the year by 10 percent, saying both USA and global shoppers are buying less. Ford projects overall auto sales of 17.4 million for the entire year, besting the record of 17.35 million achieved in 2001.

Last month’s advance lifted the monthly average so far in 2015 to 206,000.

Consumer spending accounts for more than two-thirds of economic output and represents a key measure of the economy’s health.

Economists watch the retail sales report closely because it provides the first indication each month of the willingness of Americans to spend.

The modest increase in retail sales was partly due to strong sales growth at miscellaneous store retailers and non-store retailers, which jumped by 1.8 percent and 1.4 percent.