WASHINGTON—Americans ramped up their online shopping and restaurant spending in October, but barely-there inflation kept overall retail sales growth muted.
The Commerce Department said Friday that retail sales rose a seasonally adjusted 0.1 percent last month, after being unchanged in September and August. Over the past 12 months, sales have risen 1.7 percent. Lower gasoline costs and meager inflation have downplayed the extent of consumer spending, as the retail sales report is not adjusted for price changes.
The U.S. economy has increasingly relied on consumers to propel growth. Consumer spending has been crucial for offsetting the drags caused by a global economic slowdown and cheaper oil prices and a stronger dollar hurting U.S. manufacturers. The October report suggests that some retailers had been expecting a busy holiday season, as one of the most critical drivers of retail sales growth—auto dealers—saw sales slip last month.
Holiday spending is projected to jump 3.7 percent this year to $630.5 billion, a gain that would be above the 10-year average in holiday sales growth of 2.5 percent, according to the National Retail Federation. Clothiers hired 19,500 workers in October ahead of the shopping rush, the government said last week.
Still, not all of the retail-related hiring will appear at stores and showrooms. Online retail giant Amazon announced plans last month to hire 100,000 seasonal workers, a massive 20 percent jump from last year that reflects how internet shopping is also changing the transportation and warehousing sector.
The auto sector appears to remain solid even with the decline in sales documented by the government last month.
Private industry reports show that car and truck purchases totaled 1.5 million in October, a 14 percent increase from a year ago, according to Autodata Corp. Ford projects overall auto sales of 17.4 million for the entire year, besting the record of 17.35 million achieved in 2001.
Economists watch the retail sales report closely because it provides the first indication each month of the willingness of Americans to spend. Consumer spending drives 70 percent of the economy. Yet retail sales account for only about one-third of spending, with services such as haircuts and Internet access making up the other two-thirds.
