The October decline in retail sales may be temporary, economists said. A key reason is that Hurricane Sandy hit the East Coast on Oct. 29 and disrupted businesses from North Carolina to Maine.
The October decline in retail sales may be temporary, economists said. A key reason is that Hurricane Sandy hit the East Coast on Oct. 29 and disrupted businesses from North Carolina to Maine.
Americans cut back sharply on spending at retail businesses in October, an indication that some may still be cautious about the economy. Superstorm Sandy may have also slowed business at the end of the month.
And wholesale inflation fell last month as a big drop in energy prices offset a rise in the cost of food.
The Commerce Department said Wednesday that retail sales dropped 0.3 percent after three months of gains. Auto sales fell 1.5 percent, the most in more than a year.
Excluding autos, gas and building materials, sales fell 0.1 percent. That followed a 0.9 percent gain in September for that category. Online and catalog purchases fell 1.8 percent, the most in a year. Electronics and clothing stores also posted lower sales.
The government said Sandy "had both positive and negative effects" on sales. Some stores and restaurants closed and lost business. Others reported sales increases ahead of the storm as people bought supplies.
In September, retail sales jumped 1.3 percent. Spending rose in nearly all categories. The buying spree helped lift economic growth in the July-September quarter and reflected growing consumer confidence. Consumer spending drives nearly 70 percent of economic activity.
The October decline in retail sales may be temporary, economists said.
A key reason is that Superstorm Sandy hit the East Coast on Oct. 29 and disrupted businesses from North Carolina to Maine. The storm also lowered auto sales last month by about 30,000, according to TrueCar.com. Overall, car sales dipped to an annual pace of 14.3 million in October, down from a 14.9 million pace in September.
Retail sales are likely to rebound this month, analysts said, because Americans are spending more on repairs and making up for lost shopping trips.
Producer Prices Dip
Wholesale prices dipped 0.2 percent in October, the Labor Department said in a separate report Wednesday. It was the first decline since May and followed big gains of 1.1 percent in September and 1.7 percent in August, increases that had been driven by spikes in energy.
Energy prices retreated a bit in October, dipping 0.5 percent but food costs were up 0.4 percent as the summer drought continued to put pressure on some food prices.
Core prices, which exclude food and energy, fell 0.2 percent in October, the biggest drop in two years. Over the past year, core prices were up a moderate 2.1 percent, evidence inflation remains under control.
In October, the fall in energy costs included a 2.2 percent drop in gasoline prices, the biggest since July, and a 3.3 percent decline in home heating oil costs.
The rise in food costs was led by an 8.1 percent increase in the price of pork, the biggest spike in four years. The summer drought in the Midwest has driven up food costs include the cost of beef and pork because animal feeds made with corn have increased in price.
The 0.2 percent drop in core prices in October reflected in part big declines in the price of passenger cars and light trucks. Without those declines, core prices would have been unchanged.
