U.S. retail sales was reported to have risen more than expected in October, boosted by purchases of motor vehicles and other miscellaneous goods, suggesting that consumer spending could help support the economy in the fourth quarter.
The Commerce Department said on Wednesday that retail sales rose 1.3% last month. Data for September on the other hand showed no change. Economists polled by Reuters had forecast sales to rise 1.0%, with estimates ranging from as low as a 0.1% decline to as high as a 2.0% jump.
Sales were also boosted by higher gasoline prices, which increased reception at stations. Tax refunds in California, which saw some households receive as much as $1,050 in checks also helped support sales. In addition, Amazon has a second Prime Day promotion in October.
Massive savings accumulated during the COVID-19 pandemic, and strong wage gains amid a tight labor market, have generally helped consumers weather higher inflation and borrowing costs.
That support is expected to fade next year when tighter monetary policy is put in place. The National Retail Federation predicted this month that holiday sales will increase between 6% and 8% this year.
The Federal Reserve has raised its policy rate by 375 basis points this year from near zero to a range of 3.75%-4.00% as it battles rampant inflation.
Excluding cars, gasoline, building materials and food services, retail sales rose 0.7% last month. Data for September was revised higher to show core retail sales rose 0.6% instead of 0.4% as previously reported.
