Retail Sales Drop for First Time in 7 Months as Inflation Damps Consumer Spending
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U.S. retail sales fell 0.1% in October, the first drop in 7 months, as consumers pulled back spending amid inflation.
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Declines were seen in 7 of 13 retail categories, led by furniture and auto sales.
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While consumer spending has been resilient, cracks are starting to show with Target reporting declines in transactions and average check size.
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Housing was the biggest driver of October's inflation rate, raising questions around how long consumer spending can continue.
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Small caps rallying over 5% could signal traders think the Fed's inflation fight is over, but it's unclear if the rally will continue into 2023/2024.