Global Economy Briefs

Retail Sales Unexpectedly Strong in October

November 16, 2022

Retail sales were unexpectedly strong in October, rising 1.3 percent month-over-month and 8.3 percent from a year earlier in nominal terms. While gasoline sales led the increase, spending ticked up in many categories—including auto dealers, grocery stores and non-store retailers. Even when adjusted for inflation, sales were the strongest seen since February, rising 0.8 percent from the previous month.* It is unclear whether the spike is associated with early holiday shopping. Looking ahead, we do not expect this strength to continue as inflation and interest rates continue to weigh on consumers.

Consumer demand for goods jumped in October—rising by 1.2 percent from the previous month in nominal terms. Spending on motor vehicles and parts rose by 1.3 percent in October from September, while retail sales excluding motor vehicles and parts rose by 1.2 percent. Spending at gasoline stations rose 4.1 percent for the month on higher crude oil prices. Retail sales less motor vehicles, gasoline, and building supplies (known as “Retail Control”) rose 0.7 percent from the previous month. Online sales at non-store retailers rose 1.2 percent in October. When adjusting goods spending for CPI inflation the real growth rate was about 0.7 percent from the previous month.*

Meanwhile, spending at food services and drinking places rose by 1.6 percent month-over-month, vs. 0.9 percent in September. However, after adjusting for CPI inflation, the real growth rate rose by about 0.6 percent from the previous month.*

* Real growth rates are The Conference Board estimates based on Census Retail Sales data and BLS CPI data