Retail sales rise faster than expected in October even as inflation pushes prices higher

- Advertisement -

  • Retail sales, excluding all goods and autos, grew 1.7% in October.
  • Price pressures due to online shopping and gasoline fueled the increase in spending.
  • Inflation is increasing at the fastest rate in 30 years, but consumers do not seem to reduce their purchases

- Advertisement -

The Commerce Department reported Tuesday that US shoppers ramped up their spending levels in October, while commodity prices rose at the fastest pace since the 1990s.

- Advertisement -

Retail sales, which is a measure of how much consumers spend on a range of goods from autos to sporting goods and food and gas, rose 1.7% for October, compared to 0.8% in the previous month.

Excluding autos, sales also grew by 1.7%, according to Census Bureau Advance Estimates,

- Advertisement -

The Dow Jones was up two numbers of 1.5% for headline print and 1% for main selling gains.

Online shopping posted the biggest relative gain for the month, up 4% and good for a 10.2% gain from a year ago. Rising prices at the pump pushed gasoline sales up 3.9% in October. Year over year, sales at stations increased by 46.8%.

The news comes after the Consumer Price Index, measuring a similar basket of goods, rose 0.9% for October and 6.2% year over year. The year-on-year gain was the strongest since 1991. Even excluding food and energy, the CPI was up 0.6% from the previous month and up 4.6% year over year.

However, retail sales numbers – which are adjusted for seasonal changes but not inflation – indicate consumers are willing to pay higher prices, despite recent indications that sentiment is at its lowest level in 10 years. is on.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote, “So much for soft consumer confidence signals slow growth; much more important than what people say.”

American homes are full of cash, thanks to a series of payments Congress approved to deal with the pandemic crisis. The total spending was more than $5 trillion and included transfer payments in the form of direct checks to millions of Americans, as well as increased unemployment benefits, most of which ended in September.

Total savings in the third quarter totaled $1.6 trillion, far beyond the peak of the pandemic but still high. However, concerns about inflation are increasing in the sentiment survey.

According to Bank of America, spending remains brisk, with loan and credit card outlays up 27% on a two-year basis.

Overall sales grew 16.3 per cent on a year-on-year basis.

Electronics and appliances also grew 3.8% for the month, while diversified retailers and building materials centers each saw a 2.8% increase and motor vehicles and parts dealers saw a 1.8% increase.

However, sales at restaurants and bars were flat for the month despite rising 29.3% year over year, and clothing stores down 0.7%, but were still up 25.8% from the same point in 2020.

A separate report from the Labor Department Tuesday showed that import prices rose 1.2% in October, ahead of the 1% Dow Jones estimate and the sharpest increase since May. This was well ahead of the 0.4% increase in September.


- Advertisement -

Stay on top - Get the daily news in your inbox

DMCA / Correction Notice

Recent Articles

Related Stories

Stay on top - Get the daily news in your inbox