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October Retail Sales Growth Slows To 0.3% As COVID Pandemic Rages

U.S. consumers spent a softer-than-expected $553.3 billion last month, the Commerce Department said Tuesday, a figure that slowed sharply from September.

U.S. Retail sales rose at a slower-than-expected pace last month, data from the Commerce Department indicated Tuesday, as spending slowed amid steady increases in weekly applications for unemployment benefits as the COVID pandemic continues to accelerate.

Headline retail sales for the month of October rose 0.3% to $553.3 billion, the Commerce Department said, slowing from a downwardly-revised 1.6% pace in September and missing the Street consensus forecast of a 0.5% advance. 

Stripping away volatile auto sales, the report indicated, put the overall figure at 0.2%, again shy of Wall Street forecasts of a 0.6% gain, while the so-called control group number, which feeds into the Federal Reserve's preferred measure of inflation, was pegged at 0.1%, down from 0.9% in September. 

"The October sales numbers are old news, and the outlook for November and December, with the exception of online, is looking very uncertain," said Ian Shepherdson of Pantheon Macroeconomics. "Spending on goods likely will continue to rise, but even that is at risk if more states follow the lead of New Mexico and Oregon and impose new stay-home orders." 

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Wall Street futures extended declines following the data release, with the Dow Jones Industrial Average sliding 280 points in the opening 90 minutes of trading, while the S&P 500, which is up 10.9% for the month, slipped 22 points while the tech-focused Nasdaq edged 15 points lower.  

Benchmark 10-year Treasury note yields fell 2 basis points to 0.882% while the dollar index, which tracks the greenback against a basket of six global currencies, slipped 0.3% to 92.453.

The spending slowdown mirrors a steady drumbeat of Americans filing for first-time unemployment benefits, which fell to 706,000 over the week ending November 7, the lowest levels since March, but still kept the four-week average at just over 755,000.