WASHINGTON (AP) U.S. retail sales rose at a solid pace in October, though the gains were boosted by one-time factors such as hurricane recovery spending and higher gas prices.
Retail sales rose a seasonally adjusted 0.8 percent last month, following two months of slight declines, the Commerce Department reported today. Excluding gasoline sales, which were inflated by higher prices, sales climbed a 0.5 percent.
The figures suggest that consumers are pulling back a bit on their spending, which could slow growth in the final three months of the year. Americans had 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 economists were disappointed by todays report. Excluding volatile categories such as gas, auto and food services, retail sales rose just 0.3 percent.
This looks very much like the end of the boost from the tax cuts, and it strengthens our conviction that (economic) growth has peaked, Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a research note.
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.
