U.S. Retail Sales Rise as Consumers Remain Resilient Amid Economic Pressures


In a sign of economic resilience, Americans stepped up their retail purchases in September, supported by low unemployment rates, steady income gains, and rising values of stocks and homes. According to the Commerce Department, retail sales rose by 0.4% from August to September, marking the third consecutive increase and improving from a previous gain of just 0.1%.

Sales growth was evident across various sectors, with online retailers, restaurants, and grocery stores reporting higher sales. However, sales at gas stations declined due to lower fuel prices. It’s important to note that these retail sales figures are not adjusted for inflation, even though prices for many goods fell slightly last month.

With the presidential election approaching, these figures highlight that household spending is driving steady economic growth, even as inflation appears to be cooling. In this context, Donald Trump has called for sweeping new tariffs on imports and lower corporate taxes to stimulate growth, while Vice President Kamala Harris advocates for expanded tax credits for families and subsidies for home construction to reduce housing costs.

“Retail sales came in well above expectations and continue to defy the ‘weak economy’ thesis,” noted Quincy Krosby, chief global strategist for LPL Financial. This sentiment is reflected in the 1% increase in restaurant sales from August to September, suggesting that many Americans are confident enough in their financial situations to boost discretionary spending. Sales at sporting goods stores also saw an uptick.

Clothing store sales surged by 1.5% last month, although electronics and furniture sales experienced declines. Recent government reports indicated that consumer prices rose by only 2.4% in September compared to the previous year, a significant decrease from the peak inflation rate of 9.1% recorded in June 2022. The Federal Reserve’s recent decision to cut its benchmark interest rate by a larger-than-usual half-point is a response to these cooling inflation rates and a weakening job market.

While the strong pace of retail sales could influence Fed officials to adopt a more cautious stance on further rate cuts, many analysts believe that the combination of cooler inflation and lower borrowing rates will help support economic growth in the coming months. The economy grew at a solid annual rate of 3% last quarter.

However, research from the Federal Reserve has highlighted a disparity in spending growth among income groups. Upper- and middle-income Americans have been driving the increase in retail spending, while lower-income households have struggled to keep up with rising prices and interest rates. Spending for lower-income consumers has increased by only 7.9% since 2018, contrasting with a 17% increase for upper-income households.

As the holiday shopping season approaches, expectations remain optimistic, with the National Retail Federation forecasting a spending increase of between 2.5% and 3.5% in November and December compared to the previous year. This is a slight decrease from last year’s 3.9% increase.

To attract shoppers, many retailers are displaying holiday merchandise and marketing earlier than in previous years. Balsam Hill, a holiday décor retailer, transformed its fall catalog into a holiday catalog, while Michaels is setting up its holiday décor shop nearly a month earlier than usual. Early sales of holiday and Halloween items have also shown significant increases.

Key Takeaways:

  • U.S. retail sales rose 0.4% from August to September, marking the third consecutive increase.
  • Low unemployment, steady income gains, and rising household wealth are supporting consumer spending.
  • Disparities in spending growth exist among different income groups, with upper-income households driving much of the increase.
  • The National Retail Federation anticipates a solid holiday shopping season, although it may not match last year’s robust growth.

In conclusion, the recent increase in retail spending illustrates the resilience of U.S. consumers despite ongoing inflationary pressures and economic uncertainty. Continued monitoring of consumer behavior will be crucial as we approach the holiday season.


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Qusai Ahmad is the founder of "Speak Accounting," a platform dedicated to simplifying Accounting and Excel for learners of all levels. Through insightful blog posts and comprehensive courses, Qusai Ahmad empowers individuals to master accounting principles and Excel skills with ease.