According to preliminary estimates, total retail and food service sales in the U.S. for the month of October are up from the previous month, indicating the government shutdown had little to no effect on consumer spending.
Total retail sales have increased 0.4 percent from September. Compared to October 2012, this is an increase of 3.9 percent. This month’s preliminary estimates indicate the strongest increase in total retail sales in the past three months.
Shoppers went out and purchased high-dollar items, such as furniture, appliances, and automobiles. Sales of motor vehicles are up 1.3 percent since September and a whopping 10.6 percent year to date.
Excluding automotive sales, which can vary greatly month-to-month, retail sales increased 0.2 percent in the month of October.
Not all sectors showed positive change, though. Building materials and garden supplies are down 1.9 percent for the month of October. However, they are up 4.2 percent year to date. This confirms the increasing strength of the U.S. housing market.
As the holiday season approaches, these statistics are great news for retailers and the U.S. economy as a whole. When the September sales advance was released last month, worry spread a downward trend was forming.
This was due to last month’s September advance, which showed a 0.1% decrease. However, the revised numbers for September, which were released with this month’s report, show total sales actually remained flat.
Counter intuitively, all three major market indices actually closed slightly down the day the report was released. It is hard to pinpoint the reason for this because so many factors influence whether or not the market trades up or down.
However, as of today, all three indices are trading higher than they were on November 20th. The Standard and Poor’s 500 Index and the Dow Jones Industrial Average are both up nearly 1 percent while the NASDAQ is up nearly 2%, since the release of the report.
The Lowe’s Home Improvement store on Lemmon Avenue in central Dallas has seen an upward trend in the number of shoppers who frequent the store. Indicating an increase in consumer confidence and spending, this is consistent with the data released in the retail sales report.
“In the past month, the customer count for this store is up 3.4%. Year to date, it is up 2.4%,” said Shon Rolfe, store manager at Lowe’s.
However, still feeling the effects of the economic downturn, some shoppers are hesitant to spend their hard earned money.
“I have been cutting back on my spending this year. I just can’t afford to spend as much as I used to because of the economic downturn,” said Misy O’Neill, a Dallas resident.
With a margin of error of plus or minus 0.5 percent, this preliminary data for October could be misleading. Next month’s report will contain revised numbers for October and will show more accurately if retail sales are actually trending upward as these preliminary numbers indicate.
