Retail sales in the U.S. rose at a lower rate than expected in October amidst a surprise drop in purchases of autos, suggesting a consumer spending slowdown that could temper the expectations of a strong fourth quarter increase in economic growth. Other data released late last week showed a second consecutive monthly drop in the countrys producer prices as services fell. The Department of Commerce said that retail sales moved up by 0.1% in October after not changing in August and September.
Nevertheless, the soft inflation as well as signs of a slowing in the spending of consumers will not likely deter the U.S. Federal Reserve policy makers from increasing their benchmark overnight lending rate that has hovered around zero for the past seven years in December.
The weak economic reports will provide cause for some caution at the Fed, but are not likely to change their expected plans.
The Department of Commerce said that retail sales moved up by 0.1% in October after not changing in August and September. Economists forecasted that sales would increase by 0.3%. Read more…