U.S. retail sales remained unchanged in October, with weak vehicle purchases dragging down overall performance. The stagnation raises concerns about consumer resilience ahead of the Federal Reserve’s upcoming policy meeting.
- October retail sales unchanged at 0.0% month-over-month
- Auto sales declined 2.1%, marking second straight monthly drop
- GM U.S. deliveries down 5.3% YoY; TSLA deliveries fell 7.8% YoY
- Core retail sales rose just 0.1% excluding autos and gasoline
- S&P 500 (SPX) and Dow Jones (DJI) both declined on the data
- Market sentiment suggests possible delay in Federal Reserve rate cuts
October retail sales showed no growth, edging flat at 0.0% month-over-month, according to the latest government data. The lack of expansion comes amid persistent weakness in the automotive sector, where sales declined 2.1% following a 1.3% drop in September. This marks the second consecutive month of contraction in auto sales, a key component of consumer discretionary spending. The broader consumer spending picture remains fragile. Excluding autos and gasoline, core retail sales rose just 0.1%, indicating narrow momentum in non-essential purchases. The auto sector’s struggles were led by declines in both new and used car sales, with General Motors (GM) reporting a 5.3% year-over-year drop in U.S. vehicle deliveries and Tesla (TSLA) seeing a 7.8% decline in U.S. deliveries during the same period. These figures point to cooling demand, possibly due to elevated interest rates and tighter household budgets. Financial markets reacted cautiously to the data. The S&P 500 (SPX) dipped 0.3% in afternoon trading, while the Dow Jones Industrial Average (DJI) fell 0.2%. Investors interpreted the flat sales as a signal that the U.S. economy may be losing steam, potentially influencing expectations for a delayed or dovish pivot by the Federal Reserve. The data adds weight to speculation that the central bank may refrain from cutting interest rates in December. The results underscore growing fragility in consumer behavior, especially in high-ticket categories. With inflation still above target and borrowing costs elevated, consumers appear to be tightening their belts despite a resilient labor market. The automotive industry, a bellwether for broader economic health, remains under pressure, with implications for wholesale distributors, dealerships, and related financial services.