Retail sales rose more than expected in October, according to a Department of Commerce report Tuesday.
Sales rose 0.8% month-on-month, topping the forecast for a 0.6% rise. And compared to a year ago, sales rose 4.3%, a two-year high.
This monthly report provides a pulse reading on consumer spending, which is the most important driver of US economic growth.
The month-on-month increase was led by higher spending on gas and at online retailers like Amazon. Furniture stores, brick-and-mortar department stores, restaurants, and bars were the only places where declines from September were recorded.
Excluding auto and gas sales which tend to be volatile, so-called core retail sales rose 0.6% (0.3% expected.) Excluding autos, sales jumped 0.8%. And, control group retail sales, which are fed directly into calculations for gross domestic product, increased by 0.8%, the highest reading since April.
“Q4 is off to a good start and this is extremely encouraging data no matter how you slice it,” said Thomas Simons, an economist at Jefferies, in a note.
The gains for September were revised higher.
“A strong reading for October retail sales would position the consumer for a strong 2016 holiday shopping season, which would be beneficial for fourth quarter consumer discretionary sector corporate earnings growth,” said S&P Global Market Intelligence strategists in a note on Monday.
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