WASHINGTON – U.S. retail sales rose at a solid pace last month, as bullish consumers bought more cars, furniture and clothes.
Retail sales increased 0.2 percent in October, the Ministry of Commerce said on Wednesday after a healthy 1.9 percent gain in the previous month. September gain was the largest in 2 ½ years and was driven by big increases in auto and gas sales in the wake of the Hurricanes Harvey and Irma.
Americans spend more freely as confidence in the economy has a jump in the past year and unemployment is at a 17-year low. Excluding gas station sales, fell sharply as prices fell, retail sales rose 0.4 percent in the last month.
Sales gains were on a large scale. Consumers spent more on electronics, groceries, clothing and sporting goods stores. Restaurants and bars reported a healthy 0.8 percent increase, the largest gain since January.
Americans are boosting their spending, but incomes are rising only slightly. That has meant that more and more people to borrow for the financing of their purchases, especially of cars. That has renewed concerns about whether the US households can stay on top of their burgeoning debt.
Car loans and credit card debt rose sharply in the July-September quarter, according to a report Tuesday by the Federal Reserve Bank of New York. That pushed the total debt of households to a record high of almost $13 trillion.
The share of Americans falling behind on their credit card bills rose to 4.6 percent, the New York Fed said, an increase of 4.4 percent compared to a year earlier. The share of auto loans that are 90 days or more overdue rose to 2.4 percent from 2.3 percent. Still, low interest rates means that the US households’ debt payments, on average, not historically high.
Petrol station sales fell 1.2 percent in the last month, the retail sales report showed, mainly because the prices nationwide fell 2.4 percent. That is a reversal from September, when gas prices spiked 13 percent in the wake of the hurricanes, which disrupted refineries on the Gulf Coast.
Automobile sales rose 0.7 percent, a solid gain after a huge increase of 4.6 percent in September. Sales probably increased by the effects of the hurricanes, which destroyed thousands of cars in Texas and Florida, that steadily to be replaced.