In October 2024, U.S. retail sales rose by 0.4% month-over-month, surpassing market forecasts of 0.3%. This marks a steady, albeit slower, growth compared to September’s upwardly revised 0.8% increase. Gains were driven by strong performances in electronics and appliance stores (2.3%), auto dealers (1.9%), and food services and drinking places (0.7%). These numbers highlight a resilient consumer base despite broader economic uncertainties, suggesting a gradual rebound in discretionary spending.

Sectors With Positive Momentum

Several retail categories demonstrated solid growth in October. Electronics and appliance stores led the way, likely benefiting from new product launches and seasonal promotions. Auto dealers followed closely as consumer demand for vehicles remained robust. Nonstore retailers, which include e-commerce platforms, experienced a modest 0.3% uptick, indicating continued strength in online shopping. Building materials and garden equipment stores also posted gains (0.5%), reflecting steady activity in home improvement projects.

Sectors Facing Challenges

Despite overall growth, some retail categories faced declines. Miscellaneous store retailers saw the steepest drop (-1.6%), followed by furniture stores (-1.3%) and sporting goods, hobby, musical instrument, and book stores (-1.1%). Clothing retailers also experienced a slight decline (-0.2%). These reductions suggest a cautious approach to spending on non-essential goods amid concerns over inflation and interest rates.

Implications for the Broader Economy

Excluding auto sales, retail growth slowed to 0.1%, while a core measure excluding food services, auto dealers, building materials, and gasoline stations edged down by 0.1%. This dip indicates softer underlying consumer activity in areas that directly impact GDP. Retail sales data, unadjusted for inflation, reflects a mix of goods purchases rather than services, painting a nuanced picture of the economy. Moving forward, analysts will watch closely to see if holiday sales sustain this momentum or if tighter monetary conditions dampen consumer confidence.