Consumers spent more on cars and electronics, but a number of retailers across industries forecast a rough holiday season on their bottom lines. (File/UPI/Gary) |
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Nov. 20 (UPI) -- Retail sales rose in October ahead of the holiday season, though economists expected sales to stay flat. Consumers particularly spent more on cars, but also on clothes, electronics and furniture.
This comes despite a 16-day government shutdown. Consumer prices were reported to decline for the month of October, and average wages inched upward. This all contributed to a 0.4 percent increase in retail sales, the highest in three months, the Commerce Department reported Wednesday.
U.S. retailers posted mixed results in their 2013 fiscal third quarters. Home improvement retailers Home Depot and Lowe's posted stronger earnings forecasts for the year, signalling a rebound in the housing market. But a drop in sales of building materials signal a flattening of the housing market.
And Walmart, the world's largest retailer, and electronics retailer Best Buy had fallen below Wall Street's expectations.
Weak performance by Walmart, Kohl's and Best Buy signal a competitive holiday season, with retailers dropping prices to allure customers. Economists expect holiday spending to remain relatively flat, but this might change given Wednesday's report.
Holiday sales to account for nearly 40 percent of yearly sales, according to the National Retail Federation. While the trade group expects holiday sales to rise, a number of retailers are narrowing their outlook, expecting their bottom lines to be hit from lowering prices.
The rise in retail sales stood at 0.2 percent excluding autos.
With mixed economic news, consumers are said to be responding well to the economy by spending more. But the Federal Reserve continues to support the economy with its easy money policy until the economy shows further signs of improvement.
[MarketWatch]
[Wall Street Journal]
[Bloomberg]
