Retail sales fall
Key measure of consumer activity down more than expected in October as auto sales slump.
November 14, 2003: 8:53 AM EST
NEW YORK (CNN/Money) - Retail sales fell in the United States in October, the government said Friday, as consumer spending continued to cool down from a red-hot third quarter.
The Commerce Department said retail sales fell 0.3 percent to $318.5 billion after falling a revised 0.4 percent in September. Excluding a decline in volatile automobile sales, retail sales rose 0.2 percent after rising a revised 0.2 percent in September.
Economists, on average, expected sales to fall 0.2 percent and sales excluding autos to rise 0.2 percent, according to Briefing.com.
U.S. stock market futures fell after the report, pointing to a negative opening on Wall Street. Treasury bond prices fell.
The decline in retail sales in October was driven by a 1.9-percent drop in automobile sales, on the heels of a 2.2-percent decline in September. Aggressive sales incentives, such as zero-percent financing, helped drive strong auto sales in the summer. The withdrawal of some of those incentives on higher-priced new vehicles has contributed to a drop in sales recently.
In a separate report, the Labor Department said its producer price index, a measure of wholesale inflation, rose 0.8 percent in October, driven largely by a big jump in prices for cars, light trucks and SUVs.
A red-hot housing market, driven by super-low interest rates, has helped support the economy for several months, boosting consumer spending on furniture, appliances and other big-ticket goods for the home.
In the Commerce Department report, sales of home furnishings rose 1.0 percent, following September's 1-percent gain. Sales of building materials and garden supplies rose 1.6 percent, following September's 1.3-percent gain.
Sales at gas stations fell 1.6 percent, following September's 0.4-percent gain, reflecting a decline in gasoline prices.
Clothing sales rose 0.1 percent, while sales of electronics and appliances were flat. |
