Retail sales are expected to be strong in October, signaling the return of the economy to normal.

Pedestrians carry Macy’s bags in San Francisco, California, USA, Thursday, September 16, 2021.

David Paul Morris | Bloomberg | Getty Images

Economists forecast a boom in retail sales in October, boosted by rising gasoline prices and early holiday purchases.

Retail sales are expected to rise 1.5%, compared with a 0.7% rise in September, according to economists polled by Dow Jones. Ex-auto sales are forecast to rise 1% from a 0.8% increase a month earlier, according to the Dow Jones.

The Census Bureau is to release the retail sales report on Tuesday, Nov.16, at 8:30 am ET.

“This is expected to be a strong number,” said Gargi Chaudhury, head of investment strategy for iShares America at BlackRock. “The last two weeks have been suggesting that retail sales will be higher than expected.”

Economists are raising their forecasts and the consensus for the October report is growing.

Michael Gapen, chief economist at Barclays in the US, said the strong numbers would be an important signal that the economy is back on track. Gapen expects 1.2% growth.

Possible Understanding of Economic Growth

The October retail sales report is one of the first data on gross domestic product for the fourth quarter. Gapen expects the economy to grow 5% in the fourth quarter after a surprisingly slow 2% pace in the third quarter.

If the number is in line with expectations, “what he tells us is if there is momentum that was restored at the end of the third quarter and is approaching the fourth quarter, we are in pretty good shape,” Gapin said. “This will be another data point that confirms the history of the soft patch rather than a slowdown.”

The retail sales report was released following a very strong October employment report. Added 531,000 jobs.

Chaudhury said that in addition to shaking off the latest concerns about Covid, consumers can spend earlier than usual ahead of the holidays to make sure they can find the gifts they want to buy. “The reason is obviously because stories of supply chain disruptions have worried consumers so much,” she said.

Clues for future inflation

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