October sales at apparel and accessories stores rose a seasonally adjusted 0.1% compared with September, as consumers faced the fallout in the housing market, high gas prices and turmoil on Wall Street.
WASHINGTON — October sales at apparel and accessories stores rose a seasonally adjusted 0.1 percent compared with September, as consumers faced the fallout in the housing market, high gas prices and turmoil on Wall Street.
Department stores, still recovering from a wave of consolidation, fared worse with a 0.5 percent drop in sales. Total retail and food service sales inched up 0.2 percent for the month, according to the monthly Commerce Department retail sales report released Wednesday.
"Gas prices and other economic issues are beginning to have an affect on consumer spending," National Retail Federation chief economist Rosalind Wells said in a statement. "While spending did increase in many important areas such as apparel and electronics, the consumer is showing caution."
Against a year earlier, October sales at apparel and accessories stores advanced 4.4 percent to $19 billion, as department store sales fell 2.1 percent to $17.3 billion.
Reports last week from large, publicly traded chains also painted October as a tough month for same-store sales, though mass retailers outperformed the pack. On Tuesday, Wal-Mart Stores Inc. beat out Wall Street's third-quarter profit projections and offered a somewhat positive take on the upcoming holiday season, which helped boost the stock market.
But on Wednesday, the Dow Jones Industrial Average retreated on credit market woes, shedding 0.6 percent to finish at 13,223.93.
Richard Yamarone, chief economist at Argus Research Corp., felt shoppers should continue to spend and said the sluggish sales increase for October was driven, in part, by heavy discounting at stores, especially in fall-related fashions such as puffy jackets and women's boots.
"That was clearly a function of the [unseasonably warm] weather and the heavy discounts to clear, what appears to us, to be bloated inventories," said Yamarone.
Despite price increases on energy goods, which should continue to be a concern with crude oil nearing $100 a barrel, the job market is generally seen as favorable for consumers.
"The only thing that matters is whether a consumer is employed and their job prospects are favorable," said Yamarone. "Right now, those primary drivers of consumer spending are at hand and those are very positive indicators."Last month, the economy added 166,000 new jobs, about twice what economists expected, with employment gains in areas of education, health care and government. Incomes have also been rising and consumers haven't necessarily spent their gains.
"The consumers have money that they can go out and spend this holiday season," said Ken Goldstein, economist at The Conference Board, contending consumers are not worried about the housing market and higher gas prices, which are already well known. "The big concern is about what's going to happen next, what could happen next. What we're looking at altogether is a consumer that is concerned, but isn't really quaking in their shoes."
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