More Americans shopped for clothes and ate out in October, taking advantage of the lower gasoline prices which led to a boom in retail sales in the U.S.
Bloomberg reports that purchases went up 0.3 percent after it dropped in September, the Commerce Department announced Nov.14 in Washington.
The cheapest gasoline in four years, coupled with rising stock values are increasing consumer confidence and the amount of money they can spend beyond basic necessities.
Aside from that, unemployment rates are on its lowest, which means Americans have more money to spend, leading analysts to believe that the booming retail industry will continue until the holidays.
Consumer confidence is increasing as 200,000 jobs are added for the past nine months, pushing down the unemployment rate to 5.8 percent. More so, salaries increased 0.8 percent
"It's good news," said Guy Berger, a U.S. economist at RBS Securities Inc. in Stamford, Connecticut, who is among the top retail-sales forecasters over the past two years, according to data compiled by Bloomberg. "Paychecks are actually getting a little bigger, more people have jobs and, in inflation-adjusted terms, people have more in their wallets and they're willing to spend it."
Retail sales of brick-and-mortar stores including sporting goods, restaurants and pharmacies, auto dealers climbed 0.5 percent while online stores reported the highest increase at 1.9 percent.
Sales of general merchandise stores like J.C. Penney Co. and Macy's did not budge last month, though this month both companies are gearing towards online sales in an effort to draw more shoppers. WalMart and Target are also planning to release week-long Black Friday Deals online in order to lure in shoppers.
"Economic conditions do seem to be strengthening," Macy's Chief Financial Officer Karen Hoguet said on a Nov. 12 earnings call. Lower gas prices, higher employment and improved consumer sentiment are helping, she said. "We're not counting on a lot of help from the economy this holiday but every little bit will help."
Holidays are the most important part of a retailer's year, contributing to 19 percent of its annual revenue, according to the National retail Federation.
