U.S. retail sales increased more than expected in October. This carries an indication that there is a possibility that Americans are starting shopping for their holidays earlier due to a shortage of supplies amid a growing pandemic contagion.
Retail sales jumped 1.7% last month based on a report released by the Commerce Department on Tuesday. Data for September has been revised higher which carries an indication that retail sales increased 0.8% instead of 0.7% as previously reported. Sales have now increased for three consecutive months.
The October reading also beat economists' forecasts that they are targeting retail sales to increase by 1.4%.
Motor vehicle unit sales increased in October for the first time in six months. Vehicle supply constraints such as the global semiconductor shortage have driven up the price of motor vehicles.
The two-year outbreak of the Covid-19 pandemic also hampered labor force growth and even led to a major decline. This has indirectly slowed down the delivery of raw materials.
Excluding cars, petrol, building materials and food services, retail sales rose 1.6% last month after rising 0.5% in September. Even when adjusted for inflation readings, retail sales increased strongly for the last month, bringing the growth rate in consumer spending above the annual rate of 1.6% recorded in the third quarter.
The US dollar index, which measures the major currency against the US dollar, increased by 0.32% to a trading level of 95.707.
The market is currently considering assessing economic developments and the impact on inflation.
