Retail sales account for a large part of consumer spending, which itself is typically the largest segment of GDP in an advanced economy. Changes in retail sales have a large effect on GDP growth rates and thus they are of great interest to economists, policy makers and financial markets.
US retail sales have been trending up since late 2015. While there have been patches of weakness along the way, later months’ figures have rebounded to higher levels. After reaching an annual growth rate of 6.6% in July, sales figures from August and September brought the annual rate back to 4.2%, a rate just above those during a similar trough at the start of the year.
According to the latest “advance” sales numbers released by the US Census Bureau, total retail sales grew by 0.8% over the month, which is more than the +0.5% expected and well up from September’s revised figure of -0.1%. On an annual basis, the growth rate increased from September’s revised figure of 4.2% to 4.6% in October.