Blitz Bureau
AMERICANS stepped up their spending at retailers last month in the latest sign that healthy consumer spending is driving the economy’s steady growth, reports AP from Washington.
Retail sales rose 0.4 per cent from September to October, the Commerce Department said on November 15, a solid increase though less than the previous month’s robust 0.8 per cent gain.
The AP report further said that a 1.6 per cent jump in sales at auto dealers drove much of the gain. Purchases climbed 2.3 per cent at electronics and appliances stores and 0.7 per cent at restaurants and bars, it said. Though some of October’s rise in retail sales reflected higher prices, it mainly indicated increased purchases.
Weakness in part
Sales in some categories fell – furniture stores, clothing outlets and drug stores, among them – though econmists said that weakness likely resulted, at least in part, from last month’s hurricanes. Sales at home and garden stores rose, potentially reflecting rebuilding activity after the storms. “The moderation in the pace of price growth is allowing consumers to ratchet up spending,” Tim Quinlan, an economist at Wells Fargo, was quoted as saying in the report.
“People may not love how much it costs to go out to eat, but their bar and restaurant spending is growing faster than prices are,” he said. The sales report arrives as retailers are poised to enter 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.
Economic outlook
The latest figures suggest that the economy is growing briskly again in the current October-December quarter, after having expanded at a sturdy 2.8 per cent annual rate in the previous quarter. Since peaking at 9.1 per cent more than two years ago, inflation has sunk to 2.6 per cent, not far above prepandemic 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 per cent higher than they were three years ago and dimmed Americans’ outlook on the economy. That, said the AP report, was a key reason why Donald Trump was able to capitalise on public discontent with the Biden-Harris administration and recapture the White House in last week’s election.
