Retail sales rise faster than expected in October even as inflation pushes prices higher : Rashtra News
Shoppers search for clothing at Uniqlo Retail Clothing Company November 12, 2021 in New York City.
Robert Nickelsberg | Getty Images
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 1.7%, 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, despite a recent indication that sentiment is at its lowest level in 10 years.
“So much for soft consumer confidence signaling slower growth; what people do is much more important than what the say,” wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics.
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.
Overall, sales are up 16.3% on a year over year basis.
Electronics and appliances also rose substantially, up 3.8% for the month, while miscellaneous retailers and building material centers each rose 2.8% and motor vehicles and parts dealers saw a 1.8% increase.
However, sales at restaurants and bars were flat for the month despite rising 29.3% year over year, and clothing stores fell 0.7% but were still up 25.8% from the same point in 2020.
A separate report Tuesday from the Labor Department showed that import prices rose 1.2% in October, ahead of the 1% Dow Jones estimate and the fastest increase since May. That was well ahead of the 0.4% increase in September.
Also, industrial production rose 1.6% in October, ahead of the 1% estimate and a rebound from the 1.3% decline in September. And capacity utilization rose to 76.4%, its highest level since December 2019.
( News Source :Except for the headline, this story has not been edited by Rashtra News staff and is published from a www.cnbc.com feed.)
Related searches :