Fed Ready to Raise Rates
Retail sales jumped 0.8% in October after being revised up for the month of September. Gains were driven by a surge in vehicle sales, which is not likely to persist. Vehicles damaged by heavy flooding in the South needed to be replaced. Gasoline station sales rose more than expected on higher gas prices; it also looks like consumers decided to drive more.
Core retail sales, which exclude spending on vehicles and gasoline stations and building material stores, saw a bigger-than-expected surge, underlining that the consumer is still in the driver’s seat for this expansion. Several spending shifts are worth noting.