US October retail sales smash forecasts

US retail sales volumes grew by 0.8% month-on-month in October to reach $465.9bn and were 4.3% higher versus a year ago, according to the Department of Commerce.

Economists had forecast a rise of 0.6% over the month.

Excluding automobiles sales were also 0.8% higher versus September (consensus: 0.5%).

Sales of motor vehicles increased by 1.1% and those of gasoline stations by 2.2%, while furniture and home furnishing stores put in the weakest performance with a drop of 0.9% agains the previous month.

September's rise in total sales was revised upwards, from a preliminary estimate of 0.6% month-on-month to 1.0%.

"The solid 0.8% m/m increase in retail sales in October brings to an abrupt end the run of weaker underlying sales gains over the past few months and, further, suggests that households were not unduly concerned by the upcoming presidential election," Paul Ashworth, chief US economist at Capital Economics, said in a research report sent to clients.

"We forecast that fourth-quarter consumption growth will be around 2.5% now, although we still think that a drop back in exports will limit overall GDP growth to nearer 2.0%."