US retail sales boost interest rate hike probability

The latest statistics show there was some serious shopping going on in the US in the weeks before the election there.

Retail sales rose more than expected in October, up 0.8 percent from the previous month. Growth from October 2015 was 4.3 percent.

In addition September’s retail sales were revised up to show a 1.0 percent increase instead of the previously reported 0.6 percent rise.

US retail sales surge in October. YoY growth +4.3%, biggest gain in almost two years! pic.twitter.com/hFBpoW2eEg— jeroen blokland (@jsblokland) November 15, 2016

Analysts said that amid the uncertainty over the election outcome, this provides some comfort that the primary driver of growth in the world’s biggest economy remains on a solid footing.

Demand for building materials was strong probably from the clean up and repairs after Hurricane Matthew.

There was a 1.1 percent increase in vehicle sales, following on from a 1.9 percent percent jump in September.

Rising fuel prices boosted receipts at service stations by 2.2 percent.

Firm US retail sales lift rate rise expectations https://t.co/E08LtcGSgR— Global Issues Web (@globalissuesweb) November 15, 2016

The numbers all indicate sustained economic strength which could prompt the US central bank, the Federal Reserve, to raise interest rates next month.

The Fed raised its benchmark overnight interest rate last December and has held it steady since, largely because of concerns over low inflation.

But inflation is creeping higher. A separate government report on Tuesday showed import prices increased 0.5 percent in October after gaining 0.2 percent in September.