WASHINGTON — Apparel retailers posted modest sales gains in October, as they cut prices in several areas to lure consumers, a pair of government reports showed on Wednesday.
Apparel and specialty stores had the strongest month, posting a seasonally adjusted 1.4 percent increase in sales to $21 billion in October, while department store sales rose 0.5 percent to $14.4 billion. General merchandise stores, a category that includes discounters and department stores, posted a 0.2 percent increase in sales to $55.3 billion.
In the overall economy, retail sales rose 0.4 percent to $428.1 billion, driven largely by a jump in gasoline prices.
“Most retail channels had another good month in October, even though consumer confidence took a hit due to the government shutdown and bickering over the debt ceiling,” said Chris G. Christopher Jr., U.S. economist at IHS Global Insight. “Department stores made a comeback in October after a poor showing in September.”
Jack Kleinhenz, chief economist for the National Retail Federation, said, “The ever-resilient consumer continues to deliver better economic news. Various retail segments contributed to this month’s growth, showing that there is an ongoing pent-up demand by consumers. Confidence and sales should continue to improve. As the holiday season draws closer, NRF remains confident in a good holiday shopping and sales season.”
Steve Coulombe, senior managing director in the corporate finance and restructuring segment of FTI Consulting, called the retail sales report a “strong showing” and said it supports FTI’s holiday sales forecast of a 4.9 percent increase.
“I think as we looked throughout the summer and into fall, there was certainly some slowing of sales growth, so October was the first month where we saw a meaningful uptick, despite what was going on in Washington,” Coulombe said.
An impasses in Congress over the federal budget led to a 16-day government shutdown in Washington, while a pending threat over the nation defaulting on its Treasury notes also sent shock waves through the economy. Congress eventually reached a short-term deal that reopened the government and averted a default.
“Consumers shrugged off the news and shopped, which is great,” Coulombe said. “When you look at income, as well as other things like household net worth, which includes home equity value and financial assets — all metrics or numbers that ultimately drive consumer spending — they were better than they were a year ago and continue to get better.”
Coulombe said FTI is keeping an eye on the level of discounting at retail and its impact on profits.
Discounting was also a factor in the Consumer Price Index’s showing of retail apparel prices, which fell a seasonally adjusted 0.5 percent for the second straight month. Women’s retail apparel prices declined 0.6 percent, while prices for men’s apparel rose 0.5 percent. Girls’ apparel prices were down 2.2 percent, while boy’s apparel prices were up 1.9 percent.
Within the women’s category, prices for suits and separates fell 2 percent, while prices for dresses dipped 1.5 percent. Prices for the broad category that includes underwear, nightwear, sportswear and accessories rose 1.7 percent, while outerwear prices were up 0.7 percent. In men’s wear, prices for pants and shorts shot up 10.3 percent in October, while prices for shirts and sweaters fell 3.4 percent, furnishings dropped 2.3 percent and the combined suits, sport coats and outerwear prices were down 1.9 percent.
The overall CPI slipped 0.1 percent in October, after rising 0.2 percent in September. The core index, which excludes volatile food and energy prices, edged up 0.1 percent last month.
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