Instant View: Retail sales hit by storm, producer prices down
NEW YORK (Reuters) - Retail sales fell in October for the first time in three months as superstorm Sandy slammed the brakes on automobile purchases, suggesting a loss of momentum in spending early in the fourth quarter.
Producer prices unexpectedly fell last month as the cost of energy and motor vehicles tumbled, according to a separate government report on Wednesday that showed little inflation pressures in the economy.
TERRY SHEEHAN, ECONOMIC ANALYST, STONE & MCCARTHY RESEARCH ASSOCIATES, PRINCETON, NEW JERSEY:
"Retail sales came in pretty much as expected. There was a decline in service station sales which might be related to slower sales of gasoline later in the month due to superstorm Sandy disruptions. We were surprised there wasn't more gain in the electronics category because of the release of the IPhone 5 in September and the Ipad in October. But that did not show up. Overall, these were not horrible numbers especially considering the disruptions in October and we think there's potential for an upward revision to third-quarter GDP because we got an upward revision to September retail sales. Third-quarter GDP will probably come in around 2 percent. I think we can expect some rebound in retail sales in the November numbers related to the storm. We can look for that in building materials and motor vehicles are likely to benefit from people replacing their automobiles after storm damage."
JOHN BRADY, MANAGING DIRECTOR AT R.J. O'BRIEN & ASSOCIATES IN CHICAGO
"There was no deviation in PPI numbers from the storm, but we did see some of that in the retail sales. But the market doesn't really care about that, especially since we can expect retail sales to rebound next month as people buy supplies to rebuild after Sandy. For the moment markets are more focused on the events in Washington."
(Americas Economics and Markets Desk; +1-646 223-6300)
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