Retail sales advanced modestly in October following September's surge that equaled the largest monthly spending increase in seven years.
Overall sales gained 0.2 percent last month, better than the flat prediction. September's torrid 1.9 percent jump, revised from 1.6 percent was the second largest single increase since the recession ended in June 2009. Only the 2.2 percent gain in March 2010 was larger.
The retail sales control group, the category used by the Bureau of Economic Analsysis to calculate GDP , which excludes construction materials, motor vehicles and parts, gasoline stations and food services, rose 0.3 percent in October and the prior month was revised up to 0.5 percent from 0.4 percent.
Sales without automobiles and trucks and gasoline added 0.1 percent and the September result was adjusted to 1.2 percent from 1.0 percent.
Reciepts at car dealers jumped 0.7 percent in October after September's hurricane related 4.6 percent replacement boost. Nine of thirteen retail categories showed improvement in the month to month value of purchased goods. Sales rose at furniture stores, electronics and appliances merchandisers, restaurants, clothing stores and sporting goods outlets.
October's widespread spending increase which built on September's surpisingly robust gains indicates that consumer optimism should continue to propel the economy into the fourth quarter and the holiday shopping season. Low unemployment, strong housing prices, a booming equity market and minimal inflation are enough to overcome the lack of substantial wages increases for most workers.
Chief Market Strategist
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