The October decline followed the best two-month stretch for retail sales in two years, a reflection of higher consumer confidence and a slowly healing job market.
Prior to the storm, business appeared more optimistic that sales would stay strong. They rebuilt their stockpiles of goods at a healthy pace in September, according to a separate report released Wednesday. But most economists expect that restocking will slow in the final three months of the year, partly because of last month's weaker retail sales.
Slower inventory rebuilding and modest consumer spending are big reasons why economists expect growth will weaken to around a 1.5 percent annual rate in the October-December quarter. That's below the government's estimate last month of 2 percent. Analysts expect that figure will be revised upward to about 3 percent when the government releases its second estimate Nov. 29.
Consumers should benefit from low inflation in the coming months, according to a third report Wednesday.
Wholesale prices fell 0.2 percent in October, the first decline since May, the Labor Department said. A big drop in gasoline and other energy prices offset a rise in food costs.
Excluding volatile food and energy costs, prices fell 0.2 percent in October. That's the biggest drop in core prices in two years. Over the past year, core prices were up a moderate 2.1 percent, evidence inflation remains under control. Wholesale prices reflect the cost of items before they reach the consumer.
D'Innocenzio reported from New York.
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