U.S. retail sales rose in October by the most in five months on purchases of autos, fuel and building materials, rebounding after Hurricane Florence may have depressed demand in September.
The value of overall sales increased 0.8% after a 0.1% decrease in the prior month that was revised from a gain, Commerce Department figures showed Thursday. The median forecast of economists surveyed by Bloomberg called for a 0.5% advance.
In the “control group” subset, which can help gauge underlying consumer demand, sales climbed a below-forecast 0.3% after a downwardly revised 0.3% increase in September. The measure excludes restaurants, car dealers, building- materials stores and gasoline stations.
The results indicate that consumption, which represents about 70% of the economy, continues to advance in the final three months of the year after posting the best back-to-back quarters of growth since 2014.
The data may be distorted by the effects of storms including Florence, which made landfall on Sept. 14 in North Carolina, and Michael, which struck Florida on Oct. 10. And while tax cuts and rising wages have buoyed spending, headwinds include higher borrowing costs and companies potentially passing on the costs of tariffs in a trade war with China.
Even so, the data probably reinforce investor bets that the Federal Reserve will lift interest rates in December for the fourth time this year, and stay on a tightening path in 2019.
