Weak US retail sales stoke growth fears
US retail sales rose less than expected in October as car sales fell, stoking fears that consumer spending could hit economic growth in the fourth quarter.
The Commerce Department said that retail sales rose 0.1% last month, after no change in September, and by 1.7% compared with October 2014.
Economists had forecast a rise of 0.3% for October.
There was a surprise 0.5% fall in sales at car dealerships, after a 1.4% increase in September.
Robust vehicle sales have underpinned overall growth in retail sales for the past two years.
Jennifer Lee, a senior economist at BMO Capital Markets, said: "This is a not a great start to the fourth quarter, which is important as we head toward the holiday shopping season."
The amount US shoppers spent online continued to rise, with online sales 7.1% higher than in October last year.
However, sales during the run-up to Christmas will prove to be the real test of consumer confidence.
Fears about the level of consumer spending prompted department store chain Macy's to cut its profit outlook for the year by 10% on Wednesday.
The revision sent the retailer's shares tumbling almost 20% this week.
Rival department store operator Nordstrom also cut its full-year forecast on Thursday, resulting in a similar slide in its shares.
James Abate, of Centre Funds, said: "People's confidence that the consumer can somehow offset this industrial recession that we've had is really being shaken to the core with the disappointing numbers from some of these major retailers."
There was some good news for retailers on Friday, however, as J.C. Penney reported a slightly better than expected 4.8% rise in quarterly sales.
The company was boosted by demand for homeware and footwear, and strong sales at Sephora beauty concessions.
However, J.C. Penney still posted a loss of $137m for the three months to October, compared with a $188m loss last year, and investors sent the firm's shares down 10%.