Americans cut back sharply on spending at retail businesses in October, an indication that some may still be cautious about the economy. Superstorm Sandy may have also slowed business at the end of the month.
The Commerce Department said Wednesday that sales dropped 0.3 percent after three months of gains. Auto sales fell 1.5 percent, the most in more than a year.
Excluding autos, gas and building materials, sales fell 0.1 percent. That followed a 0.9 percent gain in September for that category. Online and catalog purchases fell 1.8 percent, the most in a year. Electronics and clothing stores also posted lower sales.
The government said Sandy "had both positive and negative effects" on sales. Some stores and restaurants closed and lost business. Others reported sales increases ahead of the storm as people bought supplies.
In September, retail sales jumped 1.3 percent. Spending rose in nearly all categories. The buying spree helped lift economic growth in the July-September quarter and reflected growing consumer confidence. Consumer spending drives nearly 70 percent of economic activity.
The October decline in retail sales may be temporary, economists said.
A key reason is that Superstorm Sandy hit the East Coast on Oct. 29 and disrupted businesses from North Carolina to Maine. The storm also lowered auto sales last month by about 30,000, according to TrueCar.com. Overall, car sales dipped to an annual pace of 14.3 million in October, down from a 14.9 million pace in September.
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Retail sales are likely to rebound this month, analysts said, because Americans are spending more on repairs and making up for lost shopping trips.
The Commerce Department's retail sales report is closely watched because it is the government's first look at consumer spending each month.
Hiring has picked up in recent months, which has boosted consumer confidence. Employers added 171,000 jobs in October and job gains in August and September were higher than first estimated. The unemployment rose to 7.9 percent from 7.8 percent as more of those out of work began searching for jobs.
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A survey by the University of Michigan last week found that consumer sentiment improved for the fourth straight month to its highest level in five years.