http://www.marketwatch.com/story/us-retail-sales-retreat-in-october-2012-11-14?siteid=bigcharts&dist=bigcharts
Nov. 14, 2012, 10:17 a.m. EST
U.S. retail sales retreat in October
Sellers hurt by hurricane, but demand weaker in most categories
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By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — Retail sales in the U.S. fell in October by
the sharpest amount since June, hurt by the effects of Hurricane Sandy,
but data released Wednesday also showed weak consumer demand in a number
of areas.
Retail sales dropped a seasonally adjusted 0.3% last month, the Commerce
Department said. Economists surveyed by MarketWatch had expected a
smaller 0.1% decline.
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• Retail sales fall in October, hurt by Sandy
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Business was slow for most retail segments, but auto dealers bore the
brunt. Dealers’ sales sank 1.5% in October, marking the biggest drop in
more than a year.
Auto dealers on the East Coast reported a disruption in business at the
end of October, and some sales were not completed because of the deadly
superstorm.
Excluding the huge auto sector, retail sales were unchanged even though
most segments reported a drop in business. The reason: a 1.4% increase
in sales at gasoline stations, the residue of a spike in fuel prices at
the end of the summer.
If service stations are omitted, however, retail sales fell a sharper
0.5% in October. Sales declines were reported by Internet sellers,
department stores, home-improvement outlets and bars and restaurants, as
well as retailers that sell electronics, appliances and home
furnishings.
The decline in sales at home-improvement stores was particularly
surprising. Sales were expected to rise on the expectation that
Americans would snap up tools, batteries and other equipment in
anticipation of the storm.
Because of the hurricane, analysts say, it’s hard to glean any trends
from the October retail report. The storm has distorted a number of
economic reports and it may take several months for the effects to
dissipate.
“The report highlights that data will be even more volatile than usual
owing to the impact of the storm that rocked New York and New Jersey in
late October and early November,” said economist Julia Coronado of BNP
Paribas.
Retail spending has increased a solid 3.8% over the past 12 months,
although in fits and starts. Consumers’ buying patterns have been
erratic from one month to the next: Big increases in spending are often
followed by small gains or even outright declines.
Retail spending is unlikely to speed up, economists say, until hiring
accelerates and wage rise at a faster pace. Consumers have dipped into
their savings over the past year to finance some of their purchases, a
trend that’s not sustainable in the long run.
Green for grocers
A padlock blocked beach access for vehicles in Daytona Beach, Fla., as
Hurricane Sandy skirted the Sunshine State late last month.
The only retailers aside from gas stations to post higher sales were
grocers and stores that sell music, books, sporting goods and other
hobby items.
Sales at groceries apparently surged in the East in the days leading up
to the storm as residents sought to stock up on supplies.
In September, meanwhile, the increase in retail sales was revised up to
1.3% from 1.1% previously. Sales in August were revised down to a 1.0%
increase from a prior reading of 1.2%.
Over the past 12 months, U.S. retail sales have climbed 3.8%, data show.
U.S. stocks took the data on retail sales in stride, as Wall Street
traded in a choppy early pattern. The Dow Jones Industrial Average
DJIA
-0.68%
was recently off about 10 points, lagging other equity benchmarks.
Read more in Market Snapshot.
Jeffry Bartash is a reporter for MarketWatch in Washington.
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