NEW YORK—Retail sales in the United States increased for the fourth consecutive month, gaining 1.2 percent in October as consumers snapped up automobiles and made early holiday purchases.
The 1.2 percent jump in sales is the biggest gain since March, according to data released Monday by the U.S. Department of Commerce. The gain also surpassed all economist estimations surveyed by Bloomberg.
“Although still cautious and in search of value, the American consumer has returned,” said Sandy Kennedy of the Retail Industry Leaders Association.
“With four consecutive months of sales gains, retailers are happy to turn the page on the last three years and embrace a more optimistic future. As the holiday shopping season arrives, retailers are eager to attract these shoppers back to their stores with attractive product assortments and great deals.”
Auto Sales Leading the Way
Sales of automobiles were brisk, gaining 5 percent in October as more consumers flocked to showrooms across the nation. Retail sales excluding autos increased by 0.4 percent, which were consistent with analyst expectations.
Revenues by nonstore merchants, or Internet retailers, showed great demand, which bodes well for Internet merchants as consumers on a budget are saving gas and taking advantage of free shipping deals.
Building materials and equipment sales increased by 1.9 percent, while sales at electronics stores did not fare as well, with revenues falling by 0.7 percent during the month. That figure will likely rise as the holiday shopping season ramps up.
Stores selling furniture and health/personal care items also experienced slight sales declines.
The October sales data is great news for retailers and merchants heading into November and December, typically the two biggest shopping months in any given year—this year more than ever, retailers are preparing massive promotions to boost sales in an economy still plagued by high unemployment and consumer debt.
Several major discount and department stores are set to release third-quarter financials and their fourth quarter sales forecasts this week, including Wal-Mart Stores Inc., Target Corp., and luxury retailer Saks Inc.
Weaknesses Remain
Consumer spending and retail sales are an important gauge on the health of the U.S. economy—more 50 percent of the U.S. GDP depends on consumer spending.
In addition, corporations are competing to boost sales revenues as the year winds down. For small businesses, the holiday shopping season could make or break their fiscal year.
Two biggest obstacles for retailers this shopping season is high consumer debt load and a high unemployment rate.
The unemployment rate in the United States is hovering around the mid-9 percent range with little movement over the past few months. While unemployment has been a drag on retailers, last month the private sector added 159,000 jobs.
Stocks Come Out Ahead on Monday
U.S. stocks got a small lift on Monday on news of better-than-expected retail sales and a major M&A deal involving Caterpillar Inc.
The Dow Jones Industrial Average gained 9.4 points, or 0.08 percent. The S&P 500 lost 1.5 points, while the Nasdaq Composite Index declined 4.4 points.
Construction equipment maker Caterpillar announced on Monday that it bought mining equipment company Bucyrus International for $8.6 billion, looking to capitalize on increased demand on commodities and raw materials due to growth of emerging market economies.
Caterpillar CEO Doug Oberhelman called the acquisition “a strong statement about our belief in the bright future of the mining world.”
The 1.2 percent jump in sales is the biggest gain since March, according to data released Monday by the U.S. Department of Commerce. The gain also surpassed all economist estimations surveyed by Bloomberg.
“Although still cautious and in search of value, the American consumer has returned,” said Sandy Kennedy of the Retail Industry Leaders Association.
“With four consecutive months of sales gains, retailers are happy to turn the page on the last three years and embrace a more optimistic future. As the holiday shopping season arrives, retailers are eager to attract these shoppers back to their stores with attractive product assortments and great deals.”
Auto Sales Leading the Way
Sales of automobiles were brisk, gaining 5 percent in October as more consumers flocked to showrooms across the nation. Retail sales excluding autos increased by 0.4 percent, which were consistent with analyst expectations.
Revenues by nonstore merchants, or Internet retailers, showed great demand, which bodes well for Internet merchants as consumers on a budget are saving gas and taking advantage of free shipping deals.
Building materials and equipment sales increased by 1.9 percent, while sales at electronics stores did not fare as well, with revenues falling by 0.7 percent during the month. That figure will likely rise as the holiday shopping season ramps up.
Stores selling furniture and health/personal care items also experienced slight sales declines.
The October sales data is great news for retailers and merchants heading into November and December, typically the two biggest shopping months in any given year—this year more than ever, retailers are preparing massive promotions to boost sales in an economy still plagued by high unemployment and consumer debt.
Several major discount and department stores are set to release third-quarter financials and their fourth quarter sales forecasts this week, including Wal-Mart Stores Inc., Target Corp., and luxury retailer Saks Inc.
Weaknesses Remain
Consumer spending and retail sales are an important gauge on the health of the U.S. economy—more 50 percent of the U.S. GDP depends on consumer spending.
In addition, corporations are competing to boost sales revenues as the year winds down. For small businesses, the holiday shopping season could make or break their fiscal year.
Two biggest obstacles for retailers this shopping season is high consumer debt load and a high unemployment rate.
The unemployment rate in the United States is hovering around the mid-9 percent range with little movement over the past few months. While unemployment has been a drag on retailers, last month the private sector added 159,000 jobs.
Stocks Come Out Ahead on Monday
U.S. stocks got a small lift on Monday on news of better-than-expected retail sales and a major M&A deal involving Caterpillar Inc.
The Dow Jones Industrial Average gained 9.4 points, or 0.08 percent. The S&P 500 lost 1.5 points, while the Nasdaq Composite Index declined 4.4 points.
Construction equipment maker Caterpillar announced on Monday that it bought mining equipment company Bucyrus International for $8.6 billion, looking to capitalize on increased demand on commodities and raw materials due to growth of emerging market economies.
Caterpillar CEO Doug Oberhelman called the acquisition “a strong statement about our belief in the bright future of the mining world.”
