October 2017 Retail Sales

Retail sales gained in October 2017 according to the Census Bureau.  After an upwardly revised tally of 1.9 percent (originally 1.6 percent) in September, receipts grew 0.2 percent.  This slowdown was anticipated because the prior month’s tally was influenced by post-hurricane vehicle replacement which caused auto sales to jump 4.6 percent as the third-quarter came to a close.

Spending growth was fairly evenly distributed as just a few categories had negative signs in front of them.  Vehicle sales continued to motor along, increasing 0.8 percent.  Outlays for furniture grew 0.7 percent, as did electronics sales.  Clothing managed to put on another 0.8 percent, and the sporting goods, hobby, book, and music stores jumped 1.5 percent.  Only building supply stores, gasoline stations, and nonstore retailers declined. 

Also helping to offset those small declines was Atlas’ favorite category, food services & drinking places.  This group experienced an uptick of 0.8 percent in receipts.  This highly discretionary category has advanced 3.2 percent in the past year and continues demonstrating consumers’ willingness to spend more money on food than would be necessary if they ate at home, a sign of optimistic consumers.

This iteration of retail sales is constructive for the economy.  Despite the surge in the prior period due to exogenous shocks (i.e., hurricanes), Americans parted with even more cash in October.  While this indicator does not include services, it does provide a frequent look at the behavior of Americans, and they are relentlessly acting like spenders, not savers.