Retail sales indicate steady demand heading into holidays

U.S. retail sales rose in October after an unexpected surge the month before, a sign of strong economic demand heading into the busy holiday season.

Bloomberg reported Tuesday that overall sales rose 0.2 percent in October after rising by 1.9 percent in September, while automobile sales continued to climb 0.7 percent after a 4.6 percent surge related to hurricane relief efforts.

{mosads}

According to the data obtained from the Commerce Department, nine out of the 13 major retail categories showed month-over-month increases in sales value. The categories that saw increases include everything from sporting goods to appliance sales and restaurants.

Gas prices also dropped on average in October, according to data taken from service station receipts. Many economists feared a surge in gas prices after Hurricane Harvey struck Texas and Louisiana, where much of the industry’s infrastructure is located. An initial surge in prices broke, however, and prices on average dropped in October.

Still, policy advisers to President Trump said in September that even a short-term price surge could have negative consequences for the U.S. economy.

“The negative effect will be not pretty,” Stephen Moore, a Heritage Foundation fellow and former Trump aide, told The Hill in September.

“We’re talking about maybe knocking half a percent, or one percent, off GDP for a quarter or two, higher gas prices for sure, because Houston is the energy capital of the country. … So all those things are negative.”

“It’s a question of how much the prices are already starting to rise,” he added. “I don’t know how fast this industry can recover … Could we see gas prices over $3? Potentially. That would be a big hit to consumer finances.”