US retail sales unexpectedly rose in October as an increase in purchases of motor vehicles and a range of other goods offset a decline in demand for building materials, suggesting consumer spending remained fairly strong early in the fourth quarter.
The Commerce Department said on Wednesday retail sales increased 0.2 percent last month. Data for September was revised to show sales jumping 1.9 percent rather than the previously reported 1.6 percent advance. Retail sales increased 4.6 percent on an annual basis.
Economists polled by Reuters had forecast that retail sales would be unchanged in October. The slowdown from September’s robust pace largely reflected an unwinding of the boost to building materials and gasoline prices after recent hurricanes.
Receipts at auto dealerships increased 0.7 percent after soaring 4.6 percent in September. Sales at gardening and building material stores fell 1.2 percent last month after surging 3.0 percent in September.
US markets remain in the negative zone with a bad performance from the Dow Jones Industrial Average which fell 131 points or 0.5%, followed with a fall in markets as Euro rose. This was accompanied by US investors worrying about Republicans' tax reforms led by weak inflation data and retail sales readings.
Analysts said inflation and retail data are likely to add more enthusiasm to Federal Reserve (Fed) leaders to raise US interest rates next month, but there is some uncertainty about the future direction of borrowing costs, especially with a new decision maker for Fed and some changes to the decision-making committee.