Joseph Bonney, Senior Editor | Nov 15, 2011 11:21AM EST
Retail sales rose 0.5 percent in October after a 1.1 percent gain in September, the Commerce Department said in a report that indicated the economy was growing as consumers approached the holiday season.
The report came as Wal-Mart, the largest retailer, said its net sales for the third quarter rose 8 percent year-over-year to $8.2 billion, but that profit slipped 2.9 percent. Consumer spending accounts for 70 percent of U.S. economic activity and is a backbone of U.S. containerized import volume.
The National Retail Federation has forecast a 2.8 percent increase in November-December sales but expects a year-over-year decline in fourth quarter imports at the 10 busiest U.S. container ports.
Other analysts expect modest growth in holiday sales. The Reuters-Michigan consumer sentiment index rose this month amid a drop in gas prices.
The Labor Department’s producer price index fell 0.3 percent last month after rising 0.8 percent in September. It was the first drop in wholesale prices in four months. One cautionary note is that consumer spending is outpacing personal savings, a situation economist say is not sustainable.
Wal-Mart CEO Mike Duke said the retail giant's U.S. customers were still worried about jobs and only one in 10 mothers taking part in its surveys view the economy as "good." With food prices rising faster than most wages, some shoppers were concerned about holiday meals, the company said.
The Commerce Department’s retail sales report said motor vehicle sales rose 0.4 percent after a 4.2 percent jump in September. Excluding autos, retail sales rose 0.6 percent, the largest increase in seven months, after advancing 0.5 percent in September.
Core retail sales, which exclude autos, gasoline and building materials, rose 0.7 percent in October after rising 0.5 percent the previous month.
-- Contact Joseph Bonney at jbonney@joc.com. Follow him on Twitter @josephbonney.