U.S. Retail Sales Rise 0.2% in October

American consumers modestly increased their spending in October, a sign households moderated after a hurricane-related bump the prior month.

Sales at restaurants, retail stores and online-shopping platforms rose 0.2% from the prior month to a seasonally adjusted $486.55 billion in October, the Commerce Department said Wednesday. Compared with a year earlier, sales increased 4.6%.

Economists surveyed by The Wall Street Journal had expected a 0.1% increase in October.

Retail sales rose 1.9% in September, revised data showed. That month, consumers in various parts of the country were grappling with major hurricanes that hit the U.S. in late summer and have muddied recent economic data.

September's surge was heavily boosted by car purchases to replace vehicles damaged by hurricanes Harvey and Irma, and by a jump in the cost of gasoline also tied to those storms.

In October, sales at gas stations fell 1.2%, likely reflecting pullback from the spike in gas prices after the storms. Motor vehicles and parts dealers had a 0.7% sales increase, compared to a 4.6% increase in September.

Excluding motor vehicles, retail sales were up 0.1% in October, and excluding gasoline, sales were up 0.4%. Excluding both categories, sales were up 0.3% from the prior month.

The data show that U.S. consumers remain on a relatively strong footing as they head into the crucial holiday season.

Consumer spending is a key driver of the U.S. economy, representing more than two-thirds of economic output. Americans have ramped up their spending in recent months, supported by low unemployment, rising confidence and a sense their personal finances are on a stronger footing a decade after the housing crisis spurred a mission to pare back debt.

Soaring sentiment hasn't been the only factor driving spending in recent months. Hurricanes Harvey and Irma, which clobbered parts of Texas and Florida and propelled rebuilding efforts, were a factor, though one that the Commerce Department has previously said it couldn't precisely quantify.

Other recent data has suggested Americans are opening their wallets as their incomes continue to pick up.

The saving rate fell to a 10-year low of 3.1% in September, as Americans boosted spending on big-ticket items like cars and refrigerators, the Commerce Department said last month.

The Federal Reserve closely eyes consumer spending data as a gauge of economic growth, and Fed officials pointed to a pickup in consumer spending as a factor in their decision to raise interest rates in June, for the second time this year.

The Fed's final meeting of the year will be held Dec. 12-13. At their September meeting, Fed officials penciled in one further rate increase this year, but some policymakers have expressed concerns about persistently soft inflation.

The Commerce Department's retail sales report can be found at

http://www.census.gov/retail/marts/www/marts_current.pdf (http://www.census.gov/retail/marts/www/marts_current.pdf)

Write to Harriet Torry at

harriet.torry@wsj.com and Eric Morath at

eric.morath@wsj.com

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November 15, 2017 08:48 ET (13:48 GMT)