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

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

U.S. shoppers accelerated their level of spending in October even as the prices of goods jumped at their fastest pace since the 1990s, the Commerce Department reported Tuesday.

Retail sales, a measure of how much consumers spent on goods ranging across categories from autos to sporting goods and food and gas, increased 1.7% for October, compared with 0.8% the previous month.

Excluding autos, sales also increased 1.5%, according to the Census Bureau advance estimate.

The two numbers were above the Dow Jones estimates of 1.5% for the headline print and 1% for the core sales gain.

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

The news comes after the consumer price index, measuring a similar basket of goods, increased 0.9% for October and 6.2% year over year. That year-over-year gain was the strongest since 1991. Even excluding food and energy, the CPI was up 0.6% from the previous month and 4.6% year over year.

However, the retail sales numbers — which are adjusted for seasonal variations but not for inflation — indicate consumers are willing to pay the higher prices.

U.S. households have been flush with cash, thanks to a series of payments Congress approved to combat the pandemic crisis. The spending as totaled more than $5 trillion and included transfer payments in the form of direct checks to the millions of Americans, as well as enhanced unemployment benefits, most of which expired in September.

Savings totaled $1.6 trillion in the third quarter, well off the pandemic peak but still at a high level. However, worries over inflation have been creeping up in sentiment surveys.

Spending has remained brisk, however, with debt and credit card outlays up 27% on a two-year basis, according to Bank of America.

This is breaking news. Please check back here for updates.

Original news source Credit: www.cnbc.com



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