US ECONOMY

US retail sales weak while inflation pressures remain subdued

PUBLISHED : Saturday, 14 November, 2015, 12:17am
UPDATED : Saturday, 14 November, 2015, 12:17am

US retail sales rose less than expected in October amid a surprise decline in vehicle purchases, suggesting a slowdown in consumer spending that could temper expectations of a strong pickup in fourth-quarter economic growth.

Other data on Friday showed a second straight monthly decline in producer prices as the cost of services fell. Weak inflation and signs of slowing consumer spending could complicate the Federal Reserve's decision next month whether to raise interest rates.

“Admittedly, this is a not a great start to the fourth quarter, which is important as we head toward the holiday shopping season,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto.

The Department of Commerce said retail sales edged up 0.1 per cent last month after being unchanged in September. Economists had forecast sales increasing 0.3 per cent.

In a separate report, the Department of Labour said its producer price index fell 0.4 per cent last month after dropping 0.5 per cent in September.

In the 12 months to October, the PPI fell 1.6 per cent, the largest decline since the revamped series started in 2009 and following on the heels of a 1.1 per cent drop in September.

October also marked the ninth consecutive 12-month decrease in the index.

 

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