Data Show Shoppers Ready for Holiday Shopping
U.S. retailers reported strong sales in October, a sign American consumers were spending with more gusto and could help keep the economy growing at a brisk pace.
Other data on Friday showed consumer sentiment rising to a seven-year high this month, also positive for the spending outlook as the country nears its traditional period of frenzied holiday shopping.
Retail sales, which account for about one-third of consumer spending, rose 0.3 percent in October, the Commerce Department said.
The gain was larger than analysts expected, and would have been higher but for a 1.5 percent drop in receipts at gasoline retailers.
"(The) numbers bode well for the crucial holiday shopping season," said Paul Diggle, an economist at Capital Economics in London. Americans turn their shopping into overdrive in late November ahead of December's Christmas holiday.
Sales rose broadly in October among retailers, from purveyors of clothing to sporting goods shops. Sales climbed 0.5 percent in a key reading that strips out volatile elements like gasoline, autos, building materials and food services.
The gains support the view that U.S. consumers are ready to play a bigger role in supporting the recent acceleration in U.S. economic growth.
Analysts expect the economy will expand about 3 percent next year, faster than the average growth rates clocked since the 2007-09 recession.
Other data showed the falling U.S. unemployment rate and lower gasoline prices lifted a preliminary November reading of the Thomson Reuters/University of Michigan's consumer sentiment index to 89.4, the highest since July 2007 .
Separately, Labor Department data showed import prices fell 1.3 percent in September, as cheaper oil and a strong dollar made it less expensive for Americans to buy goods from abroad.
While the U.S. economy has accelerated in recent months, the global economy has appeared to slow, including in China, and the price of oil has weakened significantly. This is a boon for American shoppers.
"Consumers are spending what they are saving at the gas pump," said Camilla Sutton, a currency strategist at Scotiabank in Toronto.
The dollar has gained more than 10 percent against the currencies of U.S. trading partners since June on expectations a stronger U.S. economy will lead the Federal Reserve to raise interest rates, and Friday's data led it to rise a little more against the yen and the euro.
(Reporting by Jason Lange in Washington; Additional reporting by Rodrigo Campos and Michael Connor in New York; Editing by Andrea Ricci)