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Retail sales fell 0.1% in October, the first monthly decline since March.
Washington DC
CNN
—
Americans cut their retail spending in October for the first time since March, along with interest rates The highest in 22 years.
Retail sales, seasonally adjusted but not for inflation, fell 0.1% in October from a month earlier, the Commerce Department said Wednesday. Although it was the first monthly decline since March, it was a smaller decline than economists had expected.
A decline in retail spending in October could be an early sign of an economic slowdown as U.S. consumers are squeezed by higher borrowing costs. Pay off credit card debt.
A drop in sales of some big-ticket items contributed to October’s decline. Car sales fell 1.1% in October from September, while furniture sales fell 2%. Durable goods – or goods that last at least three years – are often purchased using credit.
Americans still spent at restaurants and supermarkets at a decent pace, up 0.3% and 0.7%, respectively, in October.
The Federal Reserve has raised interest rates 11 times since March 2022 in an effort to combat high inflation. Significantly slower from a four-decade high last year.
After a summer of strong economic strength, Fed Chair Jerome Powell and other officials have said the economy needs to cool further to ensure inflation reaches its 2% target.
Wednesday’s retail sales report was good for the Fed as it showed that spending has not accelerated again or remained stubbornly strong. The decline was moderate, so no sign of serious economic weakness yet.
“The October retail sales report underscores our view that slowing income growth, excess savings and tight credit conditions are limiting consumers’ willingness and ability to spend,” Nationals chief economist Kathy Postjanczyk said in a note Wednesday.
“Together Encouraging October CPI report “And a healthy slowdown in employment growth and a rebound in consumer spending after the summer spending spree will provide comfort in the Fed’s accommodative monetary policy stance easing inflationary pressures,” he added.
The one-month data did not establish a trend, but economists widely expected the U.S. economy to cool further in the final months of the year under the weight of several economic interventions, including inflation.
Consumer Price Index It increased by 3.2% in October That was down from September’s annualized 3.7% rise from a year earlier, marking the weakest pace since March 2021, the Bureau of Labor Statistics said on Tuesday.
A separate report released on Wednesday showed inflation at the wholesale level It got cold in OctoberEnergy costs reversed a three-month trend that had seen supplier prices rise.
Chicago Fed President Austen Goolsbee said at an event hosted by the Detroit Economic Club on Tuesday that “progress continues to be made, although there is still some way to go” in getting inflation back to its target.
In addition to key inflation data, central bank officials also pay close attention to statistics measuring economic growth, the job market and housing. This is because the data helps paint a picture of some possible sources of inflation.
The US economy expanded A scorching 4.9% annual rate In the third quarter, driven largely by consumer spending. American employers have added 150,000 jobs last monthAfter adding a solid 297,000 in September, it reflects a continued cooling of the job market.
“The key to further improvement over the next few quarters will be what happens to housing inflation, as inflation in goods is already slowing and non-housing services inflation has generally been slow to adjust,” Goolsbee said.
