Retail sales fell in October for the eighth consecutive month. It was the smallest decline in that period, however, and economists said that a recovery in consumer spending could be on the way. The value of retail sales fell 2.7 per cent to $14.01 billion over the same month last year, while the size of sales dropped 1 per cent. It was the smallest drop for both volume and value since February. Retail sales have fallen for 15 of the past 16 months, with an increase in February when sales figures were distorted because of the Lunar New Year. From July to September, they fell between 4 and 4.5 per cent by value year on year and about 3 per cent by volume. The government said in a statement the smaller decline could be attributed to 'a surge in visitor arrivals and steadier employment conditions locally'. In October, unemployment fell to 7.2 per cent from a record 7.8 per cent in July, while tourist arrivals rocketed 37 per cent to 1.58 million visitors, the highest figure this year. 'The bottom line is it is good news and we can expect even better good news for domestic consumption during the final quarter,' said Ben Simpfendorfer, an economist at JPMorgan Chase. 'In Hong Kong the retail sales figures exaggerate the weakness of consumption in a downturn. That's because they emphasise consumer goods as opposed to food and services,' he said. 'Given that they improved, that implies we should see some better consumption growth in this quarter,' he said. Other economists were less optimistic. 'It's a little bit better, but still quite negative,' said Koen Rademaekers, an economist at Fortis Bank. The figures are 'better than September's, because first of all [Gross Domestic Product] is increasing a little bit, and we know that unemployment is declining, so that's the only positive thing that I see in Hong Kong,' he said. Mr Rademaekers added that retail sales figures for the next few months may level out because of the Christmas and Lunar New Year holidays. But retail sales will likely fall again once they're over. 'Afterwards we will see quite negative figures in my opinion - minus 2, 3, 4 per cent on a year-on-year basis,' he said. Fuel sales led the decline, dropping 15.6 per cent by volume, followed by furniture and fixtures sales, sinking 13.7 per cent. Sales of jewellery, watches and clocks fell 9.6 per cent while clothing sales decreased 5.9 per cent. Sales of cars and auto parts leapt 24.9 per cent, followed by shoes and other accessories, which rose 11.4 per cent. The government said 'with the exceptions of sales in supermarkets and of wearing apparel, the relative improvement in retail sales was quite broad based'.