U.S. consumers continue to power economic growth

November 22, 2019 – Retail sales (excluding auto sales) growth slowed to just 2.8 percent in October, marking the slowest pace of growth since February. While the deceleration looks dramatic, last October’s sales growth of 6.1 percent makes the year-over-year (YoY) comparable a bit tough. Sales increased in six of 13 industries last month, unchanged from September. The control group* within retail sales—which feeds into the GDP calculation—rose 0.3 percent month-over-month (MoM) in October, suggesting continued modest consumer spending growth to start Q4.

Consumer spending came in stronger than expected in the third quarter. The resilience of the U.S. consumer helped to support GDP growth even as business investment contracted for the second consecutive quarter. The pick up in disposable income growth is a positive sign for spending in the months ahead. — Michael Brown, Principal U.S. Economist at Visa

Job growth continues to slow, due mostly to a tight labor market. However, consumer confidence remains strong and prices are still stable. Leading indicators largely support continued growth in consumer spending. — Travis Clark, U.S. Assoc. Economist at Visa

Other highlights of this report:

Consumer confidence remained relatively stable in October, dropping by less than half a point. Consumers’ future expectations continued to decline despite a slight increase in their confidence in the present situation. Consumers under 35 had the largest decline in confidence, down 11 points in October.

The U.S. economy added 128,000 jobs in October, falling below both August and September’s totals. An auto worker strike led to a loss of 36,000 manufacturing jobs in October. As a result of the strike and an increase in job seekers, the unemployment rate grew slightly to 3.6 percent. These conditions are temporary and indicate October’s job growth was more robust than the headline number suggests.

Download complete report, including key monthly consumer indicator charts