Retail sales fall for first time in four months

Retail sales fell in October for the first time in four months, a sign that consumers were concerned about the trajectory of the economy and looming fiscal issues. 

Sales were $411.6 billion, a drop of 0.3 percent last month from a 1.3 percent increase in September, the Commerce Department reported Wednesday.  

The drop was driven by a 1.9 percent decline in sales of building supplies, a slide of 1.5 percent in auto sales and a 1 percent fall in electronics sales.

Taking autos, gas and building materials out of the equation, sales fell 0.1 percent after a 0.9 percent gain in September.

The reduction in spending can be partly attributed to Hurricane Sandy, which affected much of the East Coast. 

“While Hurricane Sandy certainly impacted consumer spending in the northeast and mid-Atlantic states, the larger threat to the overall economy is the impending fiscal cliff, which impacts Americans across the country,"  said Matthew Shay, head of the National Retail Federation.

"It’s imperative that policymakers address the looming fiscal cliff now to give consumers some certainty heading into the holiday shopping season.”

Consumer spending represents 70 percent of economic activity, and spending is expected to pick up in the final two months of the year, especially with the holidays approaching. 

"The underlying strength of the American consumer is encouraging but it’s far from definitive,” said Jack Kleinhenz, NRF's chief economist. 

“Even though retail sales declined in October, NRF remains confident in moderate consumer spending nationwide, and expects a solid holiday shopping season.”

This story was updtaed at 11:15 a.m.