Retail sales rose broadly in October, suggesting the economy started the fourth quarter with some vigor, and the first drop in wholesale prices in four months pointed to subsiding inflation pressures. Total retail sales increased 0.5 percent, the Commerce Department said on Tuesday, after rising 1.1 percent in September. That was above economists’ expectations for a 0.3 percent rise.
In a separate report, the Labor Department said its producer price index fell 0.3 percent last month after rising 0.8 percent in September. Economists had expected the PPI to fall only 0.1 percent.
“The data are uniformly positive,” said Eric Green, chief U.S. economist at TD Securities in New York. Retail sales “is more than enough to keep the economy going. They continue to push back the recession fears that began this summer.”
The economy grew at a 2.5 percent annual pace in the third quarter, fueled in part by consumer spending. Consumer spending — which accounts for more than two-thirds of U.S. economic activity — rose at its fastest pace in nearly a year in the third quarter. But households are significantly cutting back on saving to fund their spending.
The New York Fed’s “Empire State” general business conditions index rose to 0.61, up from minus 8.48 the month before. Economists polled by Reuters had expected a reading of minus 2.1.
ADG&A continues to believe that the economy is improving on its own without the benefit of relief from Congress. ADG&A clients should see modest increases in sales but are advised to continue to concentrate on establishing value when making sales presentations and when marketing their dispensaries.
Source: Reuters
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