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October US retail sales growth beats expectations

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According to Market Intelligence, December 2022


October US retail sales growth beats expectations

U.S. shoppers spent more than expected in October.

Retail and food services grew 1.3%, according to U.S. Census Bureau data released Nov. 16. Economists expected the figure to rise 1%, according to a consensus estimate compiled by Econoday.

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Retail sales

U.S. retail and food services sales reached $694.5 billion in October, according to the seasonally adjusted Census Bureau preliminary estimate. The increase comes after flat sales in September.

Sales at food and beverage stores rose 1.4%, the highest monthly increase among retail categories excluding gas stations, bars and restaurants. Nonstore retailers — e-commerce, mail-order shops, vending machine operators and other direct sellers — had the biggest annual increase among the same group at 11.5%.

Electronics and appliance stores posted a 0.3% sales decline in October and had the only annual decline at 12.1%.

The sales figures are not adjusted for inflation. The consumer price index rose 0.4% in October from the previous month and 7.7% over the last 12 months.

Bloated retail inventories and high inflation will challenge retailers during the important holiday shopping season this year. Third-quarter earnings for big retail names have so far been mixed, with Amazon.com Inc. and Target Corp. warning of fourth-quarter sales weakness, while Walmart Inc. raised its full-year sales guidance on the heels of stronger-than-expected results.

Default risk

The median probability of default score for all publicly traded U.S. retailers as of Nov. 14 was 4.2%, down slightly from 4.6% as of Oct. 12.

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Internet and direct marketing retailers again had the highest median market signal one-year probability of default of any sector, at 8.4%, according to S&P Global Market Intelligence data. The score, which represents the odds of default within a year, is based mainly on the volatility of share prices for public companies and accounts for country- and industry-related risks.

Bankruptcies

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There had been 15 retail bankruptcy filings in 2022 as of Nov. 15, according to Market Intelligence data, the fewest number of filings in comparable periods since at least 2010.