Retail sales rise faster than expected in October, despite painfully high inflation
Painfully high inflation continuing to squeeze US households
US retailers to see ‘very dismal’ 2023, small businesses ‘crushed’: Salvatore Stile
Alba Wheels Up International founder Salvatore Stile says importers and retailers are predicting a supply chain ‘decline coming about.’
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 a number of everyday goods, including cars, food and gasoline, rose 1.3% in October, the Commerce Department said Wednesday. Economists surveyed by Refinitiv expected sales to increase 1%.
That is a marked increase from the September data, which showed that retail sales were stagnant.
The October advance is not adjusted for inflation — which rose 0.4% last month — meaning that consumers may be spending the same but getting less bang for their buck.
INFLATION MAY HIT SOME RETIREES TWICE
Shoppers walk through a store at Tysons Corner Mall in Tysons, Virginia, on April 2, 2022. ((Photo by STEFANI REYNOLDS/AFP via Getty Images) / Getty Images)
"Although Target reported disappointing third quarter results, the October retail sales report underscores that a more discerning U.S. consumer continues to spend," said Quincy Krosby, chief global strategist for LPL Financial. "While credit cards are being used more frequently, consumers are taking advantage of earlier-than-usual holiday sales."
Sales were likely boosted by a one-time stimulus check worth up to $1,050 in California, as well as early holiday sales launched by several retailers.
The increase in sales last month was led by motor vehicles, with spending at auto dealers rising 1.3%. Furniture store sales increased 1.1%.
Higher gasoline prices also buoyed sales, with receipts at service stations rising 4.1% as the cost of fuel increased again last month.
Gas prices listed at a station in Los Angeles, California on July 19, 2022. (Frederic J. Brown/AFP via Getty Images) ((Frederic J. Brown/AFP via Getty Images) / Getty Images)
Online retail sales, meanwhile, rose 1.2%. Sales at food services and drinking places also increased 1.6%.
Not all categories saw receipts increase: Electronics and appliance store sales slipped 0.3%.
The Federal Reserve has responded to the inflation crisis with the most aggressive action in decades as it races to catch up with runaway consumer prices.
Retail sales 'have gone nowhere': Stephanie Pomboy
MacroMavens President Stephanie Pomboy joins 'Mornings with Maria' to discuss the lack of movement in retail sales, the Federal Reserve's management of the economy, and the potential for a global recession.
Policymakers approved four back-to-back 75-basis-point interest rate hikes in June, July, September and November, and have indicated that additional super-sized increases are on the table at upcoming meetings if inflation remains abnormally high.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Rising interest rates could force consumers to pull back on spending.