Is is Savings, Stocks, or Loans?

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U.S. retail sales came out for October this morn.  We got a beat.  Remember that retail sales make up 1/3rd of consumer spending.
 
Retail sales climbed by a seasonally adjusted +0.4% last month or by +0.2% if you exclude motor vehicles. September retail sales got revised up from a -0.1% decline to unchanged too.
 
Consensus expected flat seasonally adjusted retail sales in October, with a +0.2% increase in sales minus motor vehicles.   By the way, there is also a fat (+/-0.5%) margin of error.
 
Ignoring the Federal shutdown, U.S. consumers jumped on new car deals and spent money on clothes, electronics and their hobbies. Auto sales jumped +1.3%.  Sales of clothing rose +1.4%. Purchases of books, sporting goods and other hobby items advanced +1.6%.
 
Over the last 12 months, retail sales tacked on +3.9% growth.  Going back 30 years, the annual average is +6.3%. 
 
A few interesting facts:

  • Auto dealers up +11.9% from a year ago.
  • Non-store retailers up +8.2%. 
  • Furniture store sales up +7.7%.
We have seen a demand shift towards bigger purchases like cars and furniture, and Internet buying.
 
My RTI question: Are big-ticket consumers actually saving for bigger purchases now?  Or are they selling stocks and taking out loans?

 

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