Spending at retail stores rose faster than expected in October as consumers continue to open their wallets despite scorching hot inflation
Retail sales, a measure of how much consumers spent on some everyday items, including cars, food and gasoline, rose 1.3% in October, the Commerce Department said Wednesday. Economists surveyed by Refinitiv had expected sales to increase 1%.
That’s a significant increase from September data, which showed stagnant retail sales.
October’s prepayment is not adjusted for inflation – which rose 0.4% last month – meaning consumers could be spending the same amount but getting less bang for their buck.
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“Although Target reported disappointing third-quarter results, the October retail sales report shows that the US consumer continues to be more discerning in spending,” said Quincy Krosby, chief global strategist for LPL Financial. “Although credit cards are being used more frequently, consumers are taking advantage of holiday sales earlier than usual.”
Sales were likely boosted by a one-time incentive check worth up to $1,050 in California, as well as early holiday sales launched by some retailers.
Motor vehicles led the increase in sales last month, with spending at car dealers up 1.3%. Furniture store sales increased 1.1%.
Higher gasoline prices also boosted sales, and receipts at service stations rose 4.1% as the cost of fuel rose again last month.
Meanwhile, online retail sales rose 1.2%. Sales at food services and drinking establishments also increased by 1.6%.
Receipts did not increase in all categories: electronics and appliance store sales fell 0.3%.
The IS Federal Reserve He responded to the inflationary crisis with the most aggressive action in years as he stepped up to catch up with fleeing consumer prices.
Policymakers have approved four back-to-back 75-point interest rate hikes in June, July, September and November, and have signaled further big increases at upcoming meetings if inflation remains above to be tall.
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Rising interest rates could force consumers to pull back on spending.