US consumers are continuing to spend freely despite concerns that the recent slide in confidence would lead to a coast-to-coast zipping of wallets.
Official data from the US Commerce Department released Thursday show retail sales holding their own in October, unchanged from September and ahead of the -0.2% consensus expectation of the markets. Instead, sales rose by 0.7% after factoring-out auto sales which have been a roller-coaster performer of late.
Clothing sales, which rose 4% in October, led the retail sector although most categories showed some gains, only restaurants bucking the trend by registering a sharp fall.
Encouraging news also came on the jobs front, with new unemployment benefit claims falling to 388,000 – better than market expectations – and boosting the four-week moving average to below the 400,000 level for the first time in three months.
Observed Matthew Wickens of investment bank ABN-Amro: “Reports of the death of the US consumer continue to be greatly exaggerated. Conditions remain difficult and firms will keep a close eye on sales and costs, but the data are not signalling a double-dip recession.”
Data sourced from: Financial Times; additional content by WARC staff