Retail sales rose strongly in October as Americans showed continued willingness to spend – Winnipeg Free Press

WASHINGTON (AP) — Americans increased their spending at retailers last month; It was the latest sign that healthy consumer spending is supporting the economy’s steady growth.

The Commerce Department said Friday that retail sales rose 0.4% from September through October; This is a solid increase, although less than the strong 0.8% increase from the previous month.

A 1.6% increase in sales at auto dealerships accounted for the bulk of the gain. Purchases at electronics and white goods stores increased by 2.3%, and at restaurants and bars by 0.7%. Although some of the increase in retail sales in October reflected higher prices, it mainly pointed to increased purchases.

Sales in some categories, including furniture stores, clothing stores and pharmacies, fell, but economists said the weakness was at least partly due to last month’s hurricanes. Sales at home and garden stores increased, likely reflecting rebuilding activity following the storm.

“The moderate pace of price growth allows consumers to increase their spending,” said Tim Quinlan, an economist at Wells Fargo. “People may not like the cost of going out, but bar and restaurant spending is rising faster than prices.”

Friday’s report comes as retailers prepare to enter the crucial holiday shopping season in less than two weeks. Analysts are predicting a solid holiday shopping season, though not as strong as last year; Many customers are under pressure from prices that remain generally high even though inflation has eased.

The latest retail sales figures show the economy grew rapidly again in the current October-December quarter after posting solid annual growth of 2.8% in the previous quarter. Since peaking at 9.1% more than two years ago, inflation has fallen to 2.6%, not far above pre-pandemic levels. And Americans’ take-home pay has outpaced inflation for an average of 18 months.

Still, the post-pandemic surge in inflation has left prices nearly 20% higher than three years ago and darkened Americans’ view of the economy. This was the main 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 elections.

Despite high price levels, Trump inherited an economy where spending was strong, growth was solid, and unemployment was low.

Other recent economic reports also point to a healthy economy. In a sign that households, which drive much of the economy’s purchases, will continue to spend, the Conference Board’s latest consumer confidence index posted its biggest monthly gain since 2021. It’s the lowest point since the board first asked that question in 2022.

On a cautionary note, grocery sales rose only marginally last month, a sign that many Americans are still struggling to adjust to food prices that are much higher than three years ago.

Lorraine Thompson, who was shopping for groceries at Walmart in Secaucus, New Jersey, this week, said she doesn’t see any slowdown in inflation.

“Everything is high,” he said. “Meat, cheese.”

Thompson said she buys less cheese and more groceries at Walmart because she thinks the prices are lower than at other supermarkets.

The National Retail Federation predicted that shoppers will increase their spending in November and December by 2.5% to 3.5% compared to the same period a year ago. Spending during the 2023 holiday shopping season increased 3.9% more strongly than in 2022.

Some retailers say they expect consumers to spend more freely in the coming months. Affirm, the buy-now, pay-later company that’s growing as more consumers seek installment loans online, reported last week that growth in its active consumers accelerated for the third consecutive quarter, reaching nearly 20 million.

“Everything we’re seeing indicates that the consumer is feeling like they want to spend,” Michael Linford, Affirm’s chief operating officer, told the Associated Press.