October retail sales rose from the previous month, reflecting the continued resilience of the US consumer.
Retail sales rose 0.4% in October. Economists had expected spending growth of 0.3%, according to Bloomberg data. Meanwhile, September retail sales were revised upward to a 0.8% increase from an earlier reading that showed a 0.4% increase in the month, according to Census Bureau data. Car sales drove most of the increase in October’s figures, with sector sales up 1.6%.
October sales, excluding cars and gasoline, rose just 0.1%, below consensus expectations for a 0.3% increase. The control group in Tuesday’s release, which excludes several volatile categories and factors from gross domestic product value for the quarter, fell 0.1% in October, below estimates of a 0.3% increase.
However, both categories saw major revisions for September sales. Revisions showed sales in both groups rose 1.2% in September, up from previous growth of 0.7%.
“The underlying weakness in retail sales in October was accompanied by an upward revision to September earnings, suggesting that consumption growth remains strong,” Capital Economics North America economist Bradley Saunders wrote in a note to clients Friday morning .
The report comes as investors continue to closely monitor the health of the US economy as the Federal Reserve rolls back its restrictive interest rate policy. So far, economic data has largely been better than expected, which is a welcome sign for investors as markets adjust to Federal Reserve acceptance and interest rates may not cut as quickly as initially hoped.
In prepared remarks on Thursday, Federal Reserve Chairman Jerome Powell said that “the economy is not signaling that we should rush to cut rates.”
Powell added: “The strength we see in the economy right now gives us the opportunity to approach our decisions carefully.”
Friday’s data also ties in with a busy week of economic news.
Earlier this week, two reports showed that price increases in October made little progress toward the Fed’s 2% inflation target. While the releases have sparked debate about the extent to which the Federal Reserve will cut rates in 2025, traders still see the Fed cutting rates once more to close out 2024.
As of Friday morning, markets had priced in a nearly 60% chance that the Federal Reserve would cut rates by 25 basis points at its next meeting on Dec. 18, according to the CME FedWatch Tool.
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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