Retail sales fell a whopping 3.3% in October--the biggest monthly decline since the end of World War II--as consumers put the skids on a two-month auto-buying spree, the Commerce Department said today.
Retail sales for the month totaled $115.5 billion, a $3.89-billion drop from September.
Auto sales registered a 14.6% decline from September as consumers stopped the buying spree spurred by end-of-year clearance sales and financing rates in the 7.5% range.
A Commerce Department economist said the last time there was such a sharp decline in overall retail sales was in March, 1975, when sales dropped 2.2% during the height of the 1975 recession. The October drop was the biggest for any month in the postwar period, the economist said.
The drop in retail sales followed a month in which Americans increased their installment borrowing by a record $10.6 billion, largely on the strength of automobile financing. The expansion of borrowing may have accounted for a large part of the drop in retail sales.
The expansion in outstanding consumer credit during September was the largest on record, surpassing the all-time high set in May, 1984, of $9 billion, the Federal Reserve said Wednesday.
The 14.6% drop in auto sales during October also set a record for the last 40 years.