Retail Sales Improve in October on Price Increases;

By Mark Lieberman

Managing Director and Senior Economist


  • Retail sales (measured by prices) ROSE 0.26 percent or $1.4 billion in October;
  • Retail sales for September were revised downward to show a 0.32 percent decline from August instead of the originally reported 0.25 percent drop
  • Sales improved at furniture stores (up 1.1 percent) and at gasoline stations (also up 1.1 percent). The average price of a gallon of gasoline rose 1.4 percent in October;
  • Sales declined at clothing stores, sporting goods stores and at restaurants;
  • Non-store retailers (essentially online sales) accounted for 12.9 percent of all retail activity in October, up from 12.8 percent in September and 12.2 percent a year ago;
  • Auto sales ROSE $562 million or 0.5 percent in October;
  • All retail activity was up 3.1 percent year-year in October – compared with 4.1 percent in September — while the Consumer Price Index rose 1.8 percent from October 2018 to October 2019 but real average annual earnings (prices less earnings) fell 0.2 percent


  • Total retail sales have increased in seven of the last eight months with September the only negative month;
  • BLS reported the number of retail jobs ROSE in October for the second straight month (after six straight months of decline),

Data source: Census Bureau

Image result for retail activity

Consumer spending – measured by retail sales – perked up in October after an unexpected decline in September. The pick-up in sales made October a little less scary, Halloween notwithstanding. Indeed, Halloween sales are exceeded by end-of-year holiday shopping as the busiest times of the year for retailers. Who knew there was that much candy!

The Census Bureau report on retail activity is not adjusted for price changes which means an increase in prices shows up as an increase in sales, assuming no change in volume. Witness gasoline station sales which rose 1.1 percent in October as the average price of a gallon of gasoline rose 1.4 percent suggesting consumers may have reacted to the increase in prices by cutting back on driving.

The increase in furniture store sales (up 1.1 percent) in October, followed back-to-back monthly increases in existing home sales in July and August and an August increase in new home sales. Appliance store sales, which also react to home sales, slipped in October though they had increased in September.

The increase in sales also reflects higher prices from tariff increases in the Administration’s ongoing efforts to improve the nation’s trade deficit by hiking tariffs on goods (and materials) especially those from China.

Consumer spending represents about two-thirds of the economy and retail sales about 55 percent of consumer activity. The retail report suggests good news for fourth-quarter GDP as retailers head into the holiday shopping season though many large retailers have already announced cutbacks.

Hear Mark Lieberman every Friday on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124, at 6:20 am Eastern Time. You can follow him on Twitter at @foxeconomics.  

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