Retail sales in the U.S. fell in October for the first time in four months, influenced by the effects of superstorm Sandy, which hurt receipts for some and helped for others.
The 0.3 percent drop followed a 1.3 percent increase in September that was larger than previously reported, Commerce Department figures showed today in Washington. The median forecast of 83 economists surveyed by Bloomberg called for a drop of 0.2 percent. The Commerce Department said it was able to collect information from the storm-affected area, even as it was not able to quantify its impact.
Companies like General Motors Co. and Ford Motor Co. have said last month’s sales slump will probably prove temporary as the rebound from Sandy, combined with brighter job prospects, rising home prices and sturdier finances boost household confidence heading into the year-end holiday shopping season. Sustained gains in consumer spending, which accounts for about 70 percent of the economy, would help counter a slowdown in business investment.
“It’s always hard to judge the pre-buying ahead of the storm versus the lack of buying during the storm and in the aftermath,” Ken Mayland, president of ClearView Economics LLC in Pepper Pike, Ohio, said before today’s report. “The August and September numbers were rather strong, and the earlier months were rather weak, so the truth lies somewhere in between.”
Wholesale prices unexpectedly dropped in October, led by falling fuel and vehicle costs. The producer-price index dropped 0.2 percent last month after rising 1.1 percent in September, a report from the Labor Department also showed today.
Economists’ retail sales estimates in the Bloomberg survey ranged from a decline of 1.2 percent to an advance of 0.6 percent. The September reading was revised from an initially reported 1.1 percent gain.
October’s slowdown comes after the prior two months marked the best back-to-back retail sales showing since at least late 2010. Part of the jump in purchases during that period was the result of households snapping up Apple Inc.’s new iPhone 5. Support also came from car and light truck sales, which climbed in September to a 14.9 million pace, the fastest in more than four years, according to figures from Ward’s Automotive Group.
Those gains weren’t repeated in October, when Sandy, the biggest Atlantic storm in history, prevented potential shoppers from getting to stores. Today’s retail sales figures show the tempest’s effects are starting to show up in economic data.