Yahoo Finance The US economy's dominant force is far stronger than expected
Tuesday has been a huge day for US consumers. And, really, the whole US economy.
The October report on retail sales came in way stronger than expected, while earnings out of home improvement retailer Home Depot (HD) topped expectations.
Consumer spending accounts for about 70% of GDP, while the housing sector powers many consumers’ overall wealth.
The news is particularly impressive considering all of the unusual challenges facing the consumer.
“Retail sales show no adverse election impact,” Capital Economics’ Paul Ashworth said. “The hurricane [Matthew] doesn’t appear to have adversely affected underlying sales even though it struck during a weekend.”
The Census Bureau’s October report on retail sales showed sales rose 0.8% over the prior month, better than the 0.6% improvement expected by economists. Excluding autos, sales were also up 0.8%.
September’s numbers were also revised up to 0.7% from 0.6% at first print.
Inside the October report we saw strong readings from non-store retailers — where sales rose 1.5% over last month and 12.9% over the same period last year — as well as building supplies dealers, and sporting goods stores.
The numbers were so impressive enough that economists are already revising their estimates for GDP.
“We see Q3 GDP being revised up to 3.3% from and initial estimate of 2.9% and we’re presently tracking Q4 GDP of 3.1%, up 0.2 percentage point from our previous estimate,” Renaissance Macro’s Neil Dutta said.
Also on Tuesday morning Home Depot gave us a strong reading on the US housing sector as its quarterly results beat on both the top and bottom lines.
The company reported earnings per share of $1.60, better than the $1.58 expected by Wall Street analysts, on revenue of $23.15 billion. Analysts were looking for revenue to total $23.04 billion.
Same-store sales were up 5.5% in the quarter, more than the 4.4% that was expected.
Home Depot shares were up about 0.9% in pre-market trading on Tuesday.
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Myles Udland is a writer at Yahoo Finance.
Read more from Myles here; follow him on Twitter @MylesUdland
