US retail sales cooled for the first time in three months in October as a combination of factors came into play, including Hurricane Sandy, economic worries and concerns over looming tax rises and spending cuts.
Figures from the Department of Commerce showed retail sales dropped 0.3% from September to October, but were 3.8% higher than October last year.
Sales at apparel and accessories stores were 0.1% lower than in September, but were 5.5% higher than in October last year.
For department stores, the figures were down 0.3% on the previous month and down 0.9% on year; and for sporting goods stores (also including books and music), October sales were up 0.5% on the month earlier and up 4.2% on year.
According to the National Retail Federation (NRF), consumers cooled their discretionary spending in the face of inclement weather and uncertainty in Washington.
“While Hurricane Sandy certainly impacted consumer spending in the northeast and mid-Atlantic states, the larger threat to the overall economy is the impending fiscal cliff, which impacts Americans across the country,” NRF president and CEO Matthew Shay said.
“The automatic tax increases and spending cuts set to take effect at the end of the year may have more of an impact on business confidence and consumer spending than any other issue.”
The NRF is calling on US policymakers to address the looming fiscal cliff now to give consumers some certainty heading into the holiday shopping season.
NRF chief economist Jack Kleinhenz also warned that: “Hurricane Sandy will have short-term and long-term reverberations on the economy and will continue to impact consumer spending and retail sales over the coming months in the hardest-hit areas.”
But he added: “Even though retail sales declined in October, NRF remains confident in moderate consumer spending nationwide, and expects a solid holiday shopping season.”
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