The rebound in retail sales is weaker than headline figures suggest, according to an analysis by Grant Thornton's Chief Economist Diane Swonk.

Swonk notes that Banks have also tightened credit card standards and are approving less new credit, which means consumers will have to rely more on the money in their wallets than debt to finance their purchases this holiday season.

Retail sales rose 0.3% in October, after dropping more than previously reported September. The largest gain was in gasoline station sales, which got a lift from energy prices. Gains were extremely uneven. Vehicle sales rose, but at a much slower pace than in September; buyer attitudes toward vehicle purchases dropped to a four-year low.

People entertained at home instead of in restaurants and bars. Spending at restaurants and bars actually dropped during October. This is a trend - entertaining at home instead of out - that we expect to continue during the holidays.

Online spending surged nearly 1% during the month and is up more than 14% from one year ago. Online retailers needed the boost, given the large overhang of inventories as we enter the holiday shopping season.

Spending at general merchandise stores rebounded after contracting sharply in September. Almost all of that gain was in big-box discounters, which was evident with the increase in foot traffic reported by Walmart in its recent earnings report. Spending at traditional department stores is now down nearly 7% from a year ago.

Losses were much more broad-based than expected. Spending on clothing, furniture and building materials all contracted. The drop in spending on clothing largely reflects a decline in prices. Spending was actually up a bit for clothing after adjusting for the ongoing discounts.

The drop in spending on furniture and building materials was more worrisome. Home sales picked up over the summer, which is the largest single trigger to repairs and remodeling. The weakness looks like it is one of the first signs of tariffs biting on the consumer side. Most of our furniture imports come from China; furniture prices have spiked from a year ago in recent months.

Core retail sales, which go into the calculation of consumer spending, rose a tepid 0.1% after downward revisions to September. This suggests that consumers are losing some of their mojo as the year comes to an end, which is worrisome given the critical role that they have played in carrying the economy.