While cheaper gasoline may have bolstered Americans’ willingness to spend, the lower cost for fuel hurt receipts at filling stations, which declined 0.6% in October, today’s figures showed. The Commerce Department’s retail sales data aren’t adjusted for changes in prices.
The gain in October sales excluding service stations was the biggest in four months.
A gallon of regular gasoline at the pump averaged $3.34 in October, down from $3.51 the previous month, according to AAA, the biggest U.S. auto group. It dropped to $3.18 on November 11, the lowest level since February 2011.
The figures used to calculate GDP, which exclude categories such as food services, auto dealers, home-improvement stores and service stations increased 0.4% in October after rising 0.3% the prior month.
Household spending will grow at a 2.1% annualized rate in the last three months of the year, according to the median forecast of economists surveyed by Bloomberg this month. It expanded at a 1.5% pace in the third quarter, the weakest performance in two years.
Cincinnati-based Macy’s, the second-largest U.S. department-store company, this month reported fiscal third- quarter profit rose 22% from the year before.
Revenue was particularly strong in October, and the company is “entering the fourth quarter with confidence,” Chief Executive Officer Terry Lundgren said in a Nov. 13 statement.
Department-store sales increased 0.5% in October, the biggest gain since July 2012, today’s figures showed. Purchases at clothing outlets advanced 1.4%, the most in six months. Receipts at sporting goods, book and music stores rose 1.6%, the most since March 2012.
Sales at electronics and appliance stores climbed 1.4% in October, the most since April. Purchases of electronics probably got a boost from the Sept. 20 release of Apple Inc.’s two new iPhones models. The company sold a record 9 million iPhones in the weekend debut that included China among overseas markets.
Sales in November and December account for 20% to 40% of U.S. retailers’ annual revenue and 20% of their profit, according to the National Retail Federation, a Washington-based trade group.
Higher home and equity prices may help consumers feel more comfortable about spending. The Standard & Poor’s 500 Index reached a record close last week and has risen 25.4% this year through yesterday.
At the same time, home prices have continued to rise, reflecting improving demand and tight inventories. Home prices in 20 U.S. cities rose 12.8% in August from a year ago, the most since February 2006, according to the S&P/Case-Shiller index of property prices.
Today’s figures showed furniture sales jumped 1% in October after climbing 0.7%.
Changes in consumer spending, among other indicators, will help Federal Reserve policy makers gauge the strength of the U.S. expansion before paring the pace of asset buying from $85 billion a month. The Federal Open Market Committee is expected to release minutes from its Oct. 29-30 meeting today at 2 p.m.