Europe’s latest punches which inevitably land on the U.S. economy (just 0.2 percent growth in the third quarter and another spike in Italian bond rate) were countered by some good news on these shores: stronger-than-expected retail sales for October. The Department of Commerce says retail sales increased 0.5 percent, the fifth straight monthly gain. The report (PDF) cited sales of electronics and cars played key role.
We talked with the self proclaimed “Queen of Retail” Faith Hope Consolo at Prudential Douglas Elliman. She says she wasn’t surprised by the improvement in retail sales. She says consumers are getting used to this jobless recovery, they’ve been scrimping and saving and staying home instead of taking vacations. She says the people who have jobs want to reward themselves. As Consolo says, they’re ready to “spend their bank accounts.”
On the specifics of what people are buying, Consolo says the rise in SUV and truck sales might be due to Japanese factories coming back online after the devastating March earthquake and tsunami. And, when it comes to electronics, she says Steve Jobs’ death probably helped to sell four million iPhones in the first three days. Plus Consolo says some of the strength in electronics came not just from iPhone, but from people replacing household appliances damaged during storms.
In the end, today’s retails sales bodes well for a solid if not spectacular, rise in holiday spending. Consolo says the big question centers on promotion spending in advance of the season: Will retailers end up promoting themselves out of profits?
Also on today’s show, there’s a new study that shows the Internet experiences a surge during the hours between 8:45 p.m. and 10:45 p.m., thanks to 53.6 of users streaming entertainment — and Netflix online streaming reportedly takes up 32 percent of all that usage. It’s a worrying trend for bandwidth providers, as the Marketplace Daily Pulse takes a hit.