U.S. retail sales rebounded in October, but consumers cut back on purchases of big-ticket household items and clothing, which could temper expectations for a strong holiday shopping season.
The Commerce Department said on Friday retail sales increased 0.3% last month, lifted by motor vehicle purchases and higher gasoline prices, reversing September's unrevised 0.3% drop, which was the first decline in seven months.
Economists polled by Reuters had forecast retail sales gaining 0.2% in October. Compared to October last year, retail sales advanced 3.1%.
Excluding automobiles, gasoline, building materials and food services, retail sales increased 0.3% last month. Data for September was revised lower to show the so-called core retail sales slipping 0.1% instead of being unchanged as previously reported. Core retail sales correspond most closely with the consumer spending component of gross domestic product.
The rebound in core retail sales added to reports this week showing firming inflation in supporting the Federal Reserve's signal that it will probably not cut interest rates again in the near term. Other reports this month have shown solid job growth in October and an acceleration in services sector activity.