U.S. retail sales increased less than expected in October, the slowest pace in six months. Yahoo Finance’s Emily McCormick breaks down the report.

Video Transcript

JULIE HYMAN: Let's start, though, with some big retail earnings and retail numbers from the US as a whole, as well. Emily McCormick is joining us to give us the details on that. US retail sales up about 3/10 of 1%. Drill down for us, Emily.

EMILY MCCORMICK: Well, Julie, take a look at these US retail sales. That rise coming in, that 3/10 of a percent that was short of the 0.5% increase that had been expected for October over September. And this also followed a downwardly revised 1.6% rise in September. Now, taking a look by category, we saw clothing and accessories stores as well as sporting goods and hobby stores posting the biggest monthly declines.

Sales at both of those fell 4.2% month over month. And while retail sales as a whole are back above pre-pandemic levels, I do want to note that sales at clothing stores and food services and drinking places are still well below where they were before the outbreak. So still quite a bit of pressure here when we look at some of those stores hardest hit by stay-in-place orders and other restrictions.

Now, on the flip side, for categories that did well in October, we did see in nearly 1% rise in sales at building material stores. And we also saw the big standout was non-store retailers, or those online stores. Sales there rose 3.1% month over month and are now up more than 29% over last year. And we did have Amazon Prime Day as well as Target deal days taking place in October this year. So likely getting a bit of a boost from those sales events in particular.

So on the whole, consumers still spending, Julie, albeit a little bit less enthusiastically than we saw over the summer.

MYLES UDLAND: Emily, you mentioned the strong period that we saw in October for non-store retailers. A company out with earnings this morning bragging about the strength of their e-commerce business, that would be Walmart. Tell us a bit about those results.

EMILY MCCORMICK: Well, taking a look at those digital sales in particular at Walmart, those again a standout. We saw those up 79%. So moderating a bit from the 95% jump that we saw in the second quarter. But again, still much stronger than we saw before the pandemic for this company. And then taking a look at those closely watched US comparable stores excluding gas-- those are up 7.1% in the third quarter. Well above the 4.3% rise that had been expected.

And then in terms of sales trends, we did see-- Walmart mentioned that they saw their sales accelerate in September due in-part to delayed back-to-school spending. And they also saw grocery sales strengthen as the quarter progressed lead by comparable same store sales in their food category.