U.S. retail sales, excluding automobiles, inched up 0.7% in October to $230 billion, according to Commerce Dept. figures, eclipsing the 0.2 to 0.4% increase predicted by economists. However, auto sales fell by 1.9% last month, meaning that total retail sales of $301.7 billion in October were unchanged from September.
Consumer confidence may also be rattled. A recent survey of consumers in New York, New Jersey and Connecticut by consulting firm Deloitte & Touche cautions that holiday spending may be stuck in neutral. About 51% of the respondents said they are planning to spend the same amount on gifts as last year, 36% planning to spend less, and only 12% expecting to spend more.
Corporations are even more pessimistic in terms of business activity, according to a survey of 125 CEOs by the Business Roundtable.
About 60% of the companies surveyed said they expect more layoffs next year due to the continued weak economy and tight profit margins. Only 19% of those questioned said their companies plan to increase spending on business equipment next year, while 57% saying spending would be flat and 24% planning for a decline, which would indicate reduced freight demand from the business sector.
