For the first time in 16-weeks US retail sales declined. This latest disappointing result follows two-months of impressive back-to-back retail sales.
According to the Commerce Department, after posting a 1.3 per cent increase in September the effects of Superstorm Sandy triggered a 0.3 per cent drop in retail sales for October.
Although spending increased prior to the storm as people stocked up on supplies with consumers unable to hit the shops during the storm – and in some cases for several days following it – retail sales suffered.
The actual result was 0.1 per cent lower than predicted by economists.
Of the 13 primary categories of retail sales 8 showed a decline. Most notably automobile sales fell by 1.5 per cent.
Auto dealer, service station and building-material store sales do not contribute to the retail sales figure used to calculate GDP, but retail sales still declined by 0.1 per cent with these figures excluded.
The Commerce Department stated: ‘Even though we cannot isolate the effect, we did receive indications from the companies that the hurricane had both positive and negative effects on the retail sales data.’
In a separate report compiled by the Labour Department the producer-price index recorded a 0.2 per cent decline and October showed an unexpected drop in wholesale prices, primarily as a result of falling fuel and vehicle costs.
However, some industry experts are anticipating a reversal of this slump as spending rebounds from Sandy and the labour market strengthens.
Prior to the release of the report ClearView Economics LLC president Ken Mayland asserted: ‘It’s always hard to judge the pre-buying ahead of the storm verses the lack of buying during the storm and the aftermath. The August and September numbers were rather strong, and the earlier months were rather weak, so the truth lies somewhere in between.’
As of 14:35 pm
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