NEW YORK (CNN/Money) - Retail sales were flat in the United States in October, the government said Thursday, despite another steep decline in automobile sales.
The Commerce Department said retail sales were unchanged at $301.7 billion after falling a revised 1.3 percent in September. Excluding volatile automobile sales, retail sales rose 0.7 percent after falling a revised 0.1 percent in September.
Economists, on average, expected sales to fall 0.2 percent and "core" sales to rise 0.3 percent, according to Briefing.com.
Separately, the Labor Department reported that new weekly claims for unemployment benefits fell to 388,000 in the week ended Nov. 9 from a revised 396,000 the prior week. Economists, on average, expected 396,000 new claims, according to Briefing.com.
The reports helped lift U.S. stock prices, while Treasury bond prices fell.
Retail sales are closely watched by economists because consumer spending makes up about two-thirds of the total U.S. economy.
After robust sales this summer, driven by aggressive dealer incentives such as zero-percent financing, automobile sales have dropped off sharply in the fall, declining 1.9 percent in October following a 5.0 percent drop in September.
But virtually every other category of retail sales rose in October, including sales at building-supply stores, clothing stores, general merchandise retailers, health and personal care stores, electronics stores, and other outlets.
"The most important point for me is that, in a lot of economically sensitive areas, there appeared to be a pickup," said Robert Barbera, chief economist at ITG/Hoenig. "Compare with stores saying they're happy with the last two weeks of sales, and it looks like we're on somewhat firmer footing."
To help keep consumers spending despite a recession that began in March 2001, the Federal Reserve cut its target for short-term interest rates 11 times in 2001 and made one big cut last week. Lower rates cut the cost of borrowing, ostensibly putting more cash in consumers' hands.
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