Americans largely shrugged offand stepped up their spending at retail stores and online, providing a boost to the economy.
Retail sales rose a seasonally adjusted 1.7% in October from September, the U.S. Commerce Department said Tuesday. That's up from 0.8% in the previous month.
"Today's stronger-than-expected retail sales numbers further underscore that the US consumer is back, after a summer plagued by the Delta variant of the coronavirus," Matthew Sherwood, global economist at the Economist Intelligence Unit, said. "Although consumer sentiment is being hit hard by the sharp rise in inflation, it is not enough to keep households from hitting the stores and gearing up for Christmas."
Consumer prices in October surged more than 6%, the. Core inflation, which excludes, volatile food and energy costs, grew 4.6% for the month.
said earlier this month. Americans are also still buying more cars, furniture and other goods than they did before the pandemic., strong pay raises and healthy savings for many households are underpinning robust spending. Employers added 531,000 jobs last month, the Labor Department
"Core retail sales, our preferred gauge of consumer spending, rose a strong 1.6% while motor vehicle sales climbed 1.8% amid evidence that auto production is ramping up. Excluding autos, retail sales were still up a robust 1.7%," economists with Oxford Economics told investors in a research note.
Businesses and other employers are boosting pay to fill a near-record number of open jobs. Wages and salaries jumped in the July-to-September quarter, compared with the year-ago period, by the most in 20 years. That's giving more Americans extra money to spend.
"We all know the worries, but this is yet another reminder the U.S. consumer remains extremely healthy. Don't forget the consumer makes up two-thirds of the economy, so this is another great sign for our economy as we head into the holiday spending season," Ryan Detrick, chief market strategist for LPL Financial, told investors in a note.
Tuesday's retail sales figures aren't adjusted for inflation, which rose 0.9% in October, the government said last Wednesday. Inflation has eroded gains in wages and salaries for most Americans.in October from a year earlier, the government said Wednesday, the most in 31 years.
Still, the solid spending last month suggests the holiday shopping season is off to a strong start.
"We expect a blockbuster holiday season as people make up for lost time and begin to run down some of the $2.5 [trillion] in accumulated excess savings since the pandemic began," according to Oxford Economics.
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