As the holiday shopping period kicked into gear, clothing and footwear spending in the U.S. increased 1.8 percent in October to $414.52 million, according to estimates released Wednesday by the Bureau of Economic Analysis (BEA).
This marked the second straight monthly increase after an up-and-down period of losses and gains. It also reflected strong retail sales in October, with a 0.2 percent seasonally adjusted increase over September and a 4.2 percent gain unadjusted year-over-year, according to Census Bureau data.
“Despite the gradual slowdown in the U.S. economy, consumers are in a good place and October’s retail sales are a step forward into the all-important holiday season,” Jack Kleinhenz, chief economist for the National Retail Federation, said. “Uncertainty around trade policy has impacted consumer sentiment recently, but ongoing job growth, low interest rates, low inflation and the stock market hitting record highs provide support for consumer spending.”
Overall personal consumption expenditures (PCE) rose 0.3 percent, or $39.7 billion, in the month, as real PCE, adjusted for inflation, was up 0.1 percent. BEA said the $11.3 billion increase in real PCE in October reflected a $16.4 billion pickup in spending for services that was partially offset by a $7.4 billion decrease in spending for goods.
Within services, the largest contributor to the increase was spending for household electricity and gas. Within goods, new motor vehicles were the leading contributor to the decrease.
The PCE price index increased 0.2 percent, as the core index, excluding food and energy, was up 0.1 percent.
Personal income was essentially flat at $3.3 billion, while real disposable personal income (DPI), a key barometer for consumer spending, decreased 0.3 percent in October. BEA said the increase in personal income primarily reflected an increase in wages and salaries that was partially offset by decreases in personal interest income and in farm proprietors’ income. BEA adjusted October wages and salaries upward by $7.2 billion to account for strike pay and payments associated with contract ratification for members of the United Automobile Workers.
Personal outlays increased $43.1 billion in October, while personal saving was $1.29 trillion. The personal saving rate–personal saving as a percentage of DPI–was 7.8 percent.
