Retail sales up solidly in October as Americans showed continued willingness to spend
Business
Retail sales up solidly in October as Americans showed continued willingness to spend
WASHINGTON (AP) — U.S. retail sales rose last month at a healthy pace in the latest sign that consumer spending is driving the economy’s steady growth.
Retail purchases rose 0.4% from September to October, the Commerce Department said Friday, a solid increase though less than the previous month’s robust 0.8% gain. Auto dealers, restaurants and electronics stores all reported higher sales.
Last month’s rise in retail purchases suggests that the economy is growing briskly again in the current October-December quarter, after having expanded at a sturdy 2.8% annual rate in the previous quarter. Since peaking at 9.1% more than two years ago, inflation has sunk to near-optimal levels. And Americans’ take-home pay, on average, has surpassed inflation for about 18 months.
Still, the post-pandemic inflation spike has left prices about 20% higher than they were three years ago and dimmed Americans’ outlook on the economy. That was a key reason why Donald Trump was able to capitalize on public discontent with the Biden-Harris administration and recapture the White House in last week’s election.
Yet despite high price levels, Trump will inherit an economy in which spending is strong, growth is solid and unemployment low.
At the same time, the nation’s once-sizzling job market has lost some momentum. The government has estimated that America’s employers added just 12,000 jobs in October, though that total that economists say was held down by the effects of strikes and hurricanes that left many workers temporarily off payrolls.
Friday’s retail sales report arrives as retailers are poised to enter the start of the critically important holiday shopping season in less than two weeks. Analysts envision a solid holiday shopping season, though perhaps not as robust as last year’s, with many shoppers under pressure from overall still-high prices despite the easing of inflation.
The National Retail Federation has predicted that shoppers will increase their spending in November and December by between 2.5% and 3.5% over the same period a year ago. During the 2023 holiday shopping season, spending had surged by a stronger 3.9% from 2022.
