U.S. retail sales rose less than expected in October amid a surprise decline in automobile purchases, suggesting a slowdown in consumer spending that could temper expectations of a strong pickup in fourth-quarter economic growth.
The U.S. Commerce Department said on Friday retail sales edged up 0.1% last month after being unchanged in September.
Economists polled by Reuters had forecast retail sales increasing 0.3% in October after a previously reported 0.1% increase in September.
Retail sales excluding automobiles, gasoline, building materials and food services rose 0.2% after an upwardly revised 0.1% gain in September. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.
Core retail sales previously were reported to have dipped 0.1% in September. Economists had forecast core retail sales rising 0.4% last month.
The lackluster report suggests that savings from cheaper gasoline are being used to pay rents, which have increased substantially over the past year.
Still, the weak spending tone is unlikely to significantly shift expectations that the Federal Reserve will raise interest rates next month in the wake of October's robust employment report. The U.S. central bank has kept its benchmark overnight interest rate near zero since December 2008.
