By Amara Omeokwe
WASHINGTON -- Americans spent more on shopping in October while
pulling back on nonessential items, suggesting consumers'
willingness to buy remained solid but more cautious.
Retail sales -- purchases at stores, restaurants and online --
rose a seasonally adjusted 0.3% in October from a month earlier,
the Commerce Department said Friday, after a drop in September.
"Overall, this isn't a really strong number, but it should do a
lot to soothe the fear that consumers were going to struggle into
year end," said Calvin Schnure, senior economist at Nareit, an
organization that represents real estate investment trusts.
Growth in consumer spending -- a driving factor in the
decadelong U.S. economic expansion -- contrasted with another drop
in U.S. factory production. A report from the Federal Reserve
showed U.S. industrial production fell 0.8% in October, the third
decline in four months.
While the Fed attributed much of the decline to a strike last
month at General Motors Co., the decrease points to a broader
slowdown in manufacturing across the U.S. and internationally amid
global trade tensions.
Consumer spending at gas stations and on food and beverages rose
by 1.1% and 0.5%, respectively, as shopping for necessities helped
drive the overall advance in sales last month.
Spending on big-ticket items in October was mixed. Vehicle sales
were up 0.5%, while furniture and home furnishing sales dropped
0.9%, the biggest monthly decrease since December 2018, according
to the Commerce Department.
Excluding vehicles and gasoline, categories that are often
volatile, October sales were up 0.1%, as Americans spent less on
items such as clothing and eating and drinking out.
Robert Frick, corporate economist at the Navy Federal Credit
Union, said the pullback in sales of discretionary items suggests
consumers wanted to rein in spending.
"I'm in no way speaking about doom in the economy, but the
behavior of the consumer, especially right now, bears parsing and
it seems like they are feeling anxious about some things," Mr.
Frick said.
Jon Abt, co-president of Abt Electronics in Glenview, Ill., said
sales were up 8% year-over-year through the end of October, but he
senses customers are cautious about the economic outlook. His store
carries a range of household items, from appliances and fitness
equipment to furniture.
"[Sales] sort of picked up from late summer into the fall. On
the year as a whole, we're in the positive, but the numbers aren't
as great as they were over the last two years," Mr. Abt said.
October's overall rise in retail sales was in line with the
larger trend this year. While the data can be volatile month to
month, sales in the August through October period increased 1.1%
compared with the previous three months, and sales were up 3.1% in
the first 10 months of 2019 compared with the same period last
year.
Consumer spending accounts for more than two-thirds of U.S.
economic output, and has helped support the U.S. economy this year.
A steady labor market, combined with muted inflation and gains in
earnings, have encouraged Americans to spend.
Cynthia Phillips Strinich, co-owner of Phillips Toy Mart in
Nashville, Tenn., said business is stable and sales this year have
been consistent with 2018 -- a trend she expects to continue into
the holiday shopping season.
"We've had a cold snap and when that happens that really seems
to put people in the mood and they are really starting to buy," Ms.
Strinich said. "We had a great [holiday season] last year, and I
think we will again."
Walmart Inc., the nation's largest retailer, reported Thursday
that sales in stores and online grew during the company's third
quarter compared with the same period last year.
Sales at U.S. nonstore retailers -- a proxy for purchases made
online -- were robust, rising 0.9% in October from the previous
month and 14.3% from the prior year, Commerce Department data
showed. Online shopping is expected to be a strong driver of
holiday sales this year, with more than 41% of consumers planning
to make at least half of their purchases that way, according to the
Conference Board, a research group.
"Consumers are gearing up for the holidays, with signs
indicating they will not reign in their spending," said Lynn
Franco, senior director of economic indicators at the Conference
Board, in a statement.
The holiday shopping period is shorter this year, however, with
Black Friday falling a week closer to Christmas than in 2018,
giving retailers less time to entice shoppers.
Write to Amara Omeokwe at amara.omeokwe@wsj.com
(END) Dow Jones Newswires
November 15, 2019 13:37 ET (18:37 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.