U.S. Markets closed

Is is Savings, Stocks, or Loans?

John Blank

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?


Read the analyst report on DXYN

Read the analyst report on LAD

Read the analyst report on SCVL

Zacks Investment Research