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Retail sales fall
Key measure of consumer activity down more than expected in October as auto sales slump.
November 14, 2003: 10:48 AM EST

NEW YORK (CNN/Money) - Retail sales fell in the United States in October, the government said Friday, as consumer spending continued to cool down from a red-hot third quarter.

The Commerce Department said retail sales fell 0.3 percent to $318.5 billion after falling a revised 0.4 percent in September. Excluding a decline in volatile automobile sales, retail sales rose 0.2 percent after rising a revised 0.2 percent in September.

Economists, on average, expected sales to fall 0.2 percent and sales excluding autos to rise 0.2 percent, according to Briefing.com. Rather than focus on the decline in the headline number, most economists chose to be encouraged by the gain in sales ex-autos.

"Consumers are still spending money, it's just that they have are not trying to buy every vehicle on the lot," said Joel Naroff, president and chief economist at Naroff Economic Advisors in Holland, Pa.

Separately, Reuters reported that the University of Michigan's consumer sentiment index, derived from a survey of 500 households, rose to its highest level since May 2002, bolstering hopes for strength in consumer spending going forward.

Wall Street pays close attention to consumers, whose spending makes up more than two-thirds of the total economy.

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Despite the good news, U.S. stock prices fell in early trading, while Treasury bond prices rose.

The decline in retail sales in October was driven by a 1.9 percent drop in automobile sales, on the heels of a 2.2 percent decline in September. Aggressive sales incentives, such as zero-percent financing, helped drive strong auto sales in the summer. The withdrawal of some of those incentives has contributed to a drop in sales recently.

In a separate report, the Labor Department said its producer price index, a measure of wholesale inflation, rose 0.8 percent in October, driven largely by a big jump in prices for cars, light trucks and SUVs.

A red-hot housing market, driven by super-low interest rates, has helped support the economy for several months, boosting consumer spending on furniture, appliances and other big-ticket goods for the home.

In the Commerce Department report, sales of home furnishings rose 1.0 percent, following September's 1 percent gain. Sales of building materials and garden supplies rose 1.6 percent, following September's 1.3 percent gain.

Sales at gas stations fell 1.6 percent, following September's 0.4 percent gain, reflecting a decline in gasoline prices.

Clothing sales rose 0.1 percent, while sales of electronics and appliances were flat.  Top of page




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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.