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Economic News

United States: Retail Sales Edge Lower

November 15, 2023
Francis Généreux
Principal Economist


  • Retail sales dipped 0.1% in October after rising 0.9% in September.
  • Motor vehicle sales fell 1.0% after posting a 1.1% gain in September. Gas station receipts slipped 0.3%. Excluding motor vehicles and gasoline, sales were up 0.1% after climbing 0.8% in September.
  • Apart from gas stations and car dealers, sales were led lower by furniture stores (-2.0%), department stores (-1.2%), leisure goods stores (-0.8%) and miscellaneous store retailers (-1.7%).
  • Pharmacies (+1.1%), electronics stores (+0.6%) and food and beverage stores (+ 0.6%) recorded the biggest gains.


After several months of strong monthly growth, it looks like retail sales started to slow in October. The 0.1% dip in total sales was the first negative print since March, and the 0.1% advance in sales excluding motor vehicles and gasoline was also the weakest reading since March. But October’s report isn’t that bad considering the strong gains in previous months. Total sales climbed 2.2% between June and September, contributing to strong consumer spending and real GDP growth in the third quarter.


Given today’s high interest rates, we’d expect a drop in certain types of spending, and that’s what we saw in October at car dealerships and furniture stores. Consumers also pulled back on more discretionary spending last month. Sales were down at leisure goods stores and department stores, flat at clothing stores, and up just 0.3% at food services and drinking places.


Adjust for inflation and the picture is also negative, though not alarming. In real terms using consumer price index categories, there were declines in food services, nondurable goods excluding gasoline, and durable goods excluding motor vehicles and building materials stores. Real goods consumption could therefore come in negative in October, consistent with our tracking for weak real consumption growth in the fourth quarter. But at the end of the day, it’ll all come down to holiday shopping.


October’s drop in total sales suggests consumption could be slowing, which is to be expected given today’s high interest rates and relatively low confidence. A pullback in consumer spending would help to further ease inflationary pressures and reassure the Fed that it made the right decision to pause rate hikes. We’ll have to wait and see how spendthrift US consumers are this holiday season, which kicks off on Black Friday next week.