United States’ (US) retail sales rebounded in October 2018 by the most in five months. Retail sales increased month over month by 0.8% in Octo-ber relative to September’s decline of 0.1%. October’s gains were above market expectations of 0.5%. This was primarily due to increase in sales for fuel, motor vehicles and building materials. It is likely that the increase in sales were mainly driven by recovery efforts in areas affected by Hurri-cane Florence. Excluding automobiles, gasoline, building materials and food services retail sales increased by 0.3% which is in line with September’s downward revision of 0.3%.
It is likely that consumer spending is being bolstered by tax cuts, wage increases which is at a 9 ½ year high, low unemployment and high consumer confidence. If oil prices continue to trend lower, we anticipate that this may push consumer spending higher in the near term leading to US econo-my expanding in the fourth quarter. US consumer spending accounts for approximately two-thirds of US economic activity. However, we anticipate that consumer spending may slow in 2019 based on the possibility of increased tariffs as a result of escalating trade war, increase in oil prices, higher borrowing cost and the fading effects of tax cuts.