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U.S. retail sales advanced in October, sustaining September's gain as households purchased cars and a wide variety of other goods. The upbeat economic data also presents a new evidence to the U.S. Federal Reserve to tighten monetary policy in December.
According to the Commerce Department, retail sales in October rose 0.8% from the prior month. In addition to the latest report, September retail sales were revised up from a previously reported 0.6% increase and showed a final 1.0% rise. Sales rose 4.3% year-on-year in October.
Meanwhile, core retail sales rose 0.8% after a 0.3% increase in September. Overall retail sales and core sales were estimated to show 0.6% and 0.3% increase respectively last month.
Total September and October sales gain marks the biggest two-month increase in almost two years. The revised September data, along with the strong October numbers suggests that consumer spending is picking up and that the economy's third quarter GDP growth could be raised when it publishes its finalized GDP estimate this October.
Combined with data showing a rapidly tightening labor market and indications of a turnaround in the manufacturing industry, the retail data reinforced views that the Fed will raise rates during its December 13-14 policy meeting.
