US Retail Sales Beat Forecast

Retail sales in the U.S. rose more than forecast in October, a sign that consumer spending was resilient even during the government shutdown.

The 0.4 percent increase was the most in three months and followed no change in September, Commerce Department figures showed today in Washington. The median forecast of 86 economists surveyed by Bloomberg called for a 0.1 percent October advance. Sales excluding gasoline climbed 0.5 percent.

Fuel costs near their lowest levels in more than two years and household wealth boosted by rising stock and home prices may keep underpinning consumers’ ability to buy. The pickup boosts the outlook for retailers such as Macy’s Inc. heading into the holiday-shopping season.

“Maybe the rhetoric was just a little bit overblown in terms of the magnitude of the economic impact behind the partial government shutdown,” said Michael Brown, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina. The firm is the best forecaster of retail sales during the last two years, according to data compiled by Bloomberg. “As we get ready to go into the holiday shopping season, this is welcome news.”

Estimates in the Bloomberg survey ranged from a decline of 0.3 percent to a gain of 0.7 percent. The reading for September was revised from an initially reported 0.1 percent decrease.

Stock-index futures rose after the sales data and a separate report showing consumer prices declined. The contract on the Standard & Poor’s 500 Index expiring in December increased 0.2 percent to 1,788.3 at 8:46 a.m. in New York.

Bloomberg

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell