Decline exaggerated by falling gas prices, collapse of auto sales
WASHINGTON (MarketWatch) - Falling for a fourth straight month, U.S. retail sales plunged a record 2.8% in October as sales of autos and gasoline plummeted, the Commerce Department estimated Friday.
Excluding the 5.5% drop in auto purchases, retail sales fell a record 2.2%.
The figures were worse than expected, with economists surveyed by MarketWatch looking for the headline sales number to fall 2.3% and sales excluding autos expected to drop 1.7%.
Falling gasoline prices accounted for about half the decline in total sales in October. Sales at gas stations fell a record 12.7% as the average price at the pump plunged. Sales excluding gas dropped 1.5%, the biggest decline in three years.
Excluding both autos and gas, sales fell 0.5%.
Sales were quite weak across a broad swath of the retail sector in October, an indication that the fourth quarter could be worse than the just completed third quarter, when inflation-adjusted consumer spending fell at the fastest pace in 28 years.
Retail sales account for about half of consumer spending and about one-third of domestic demand.
Retail sales are down 4.1% in the past year. Sales fell a downwardly revised 1.3% in September. Sales in August were also revised lower to a 0.7% decline.
The dismal report confirms what the business sector has been saying: Consumer spending is falling rapidly. This week, for instance, Best Buy said it saw a seismic shift in spending. The world's largest retailer, Wal-Mart, reported better-than-expected revenues, but lowered its forecast for future sales.
For their part, the automakers are pleading for a lifeline from Washington, with per capita sales dropping to the lowest levels since World War II.
Details
Sales of durable goods remained weak. Sales at furniture stores dropped 2.8%, sales at electronics and appliance stores fell 2.3%, and sales at hardware stores fell 0.4%.
Sales at the mall were horrible. Department store sales dropped 1.3%, clothing store sales fell 1.4% and sporting and hobby stores sales fell 1.6%. As bad as those numbers are, they are slightly better than in September.
Sales at grocery stores were flat, while sales at bars and restaurants rose 0.3%.
Sales at health and personal care stores rose 0.4%.
Sales at nonstore outlets, such as catalogs and online stores, fell 1.8%
