Americans picked up their retail spending in September, even as they confronted an uptick in inflation, high interest rates and fears over an economic recession.
Retail sales, a measure of how much consumers spent on a number of everyday goods including cars, food and gasoline, rose 0.7% in September, the Commerce Department said Tuesday. That is above the 0.3% increase projected by Refinitiv economists and just below the revised 0.8% gain recorded in August.
Excluding the more volatile measurements of gasoline and autos, sales climbed 0.6% last month.
The September advance is not adjusted for inflation, meaning that consumers may be spending the same but getting less bang for their buck.
SILVER LINING OF HIGHER INTEREST RATES: SAVINGS ACCOUNT RATES
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| WMT | WALMART INC. | 161.21 | +1.38 | +0.86% |
| HD | THE HOME DEPOT INC. | 297.33 | +5.41 | +1.85% |
| LOW | LOWE’S COMPANIES INC. | 198.25 | +2.50 | +1.28% |
| TGT | TARGET CORP. | 111.39 | -0.59 | -0.53% |
Consumers spent more at grocery stores, gas stations, health and personal stores and restaurants and bars. They also continued to open their wallets when online shopping, with spending at non-store retailers jumping 1.1% from the previous month, and at miscellaneous store retailers, which surged 3% over the course of the month.
“Consumer spending shows little sign of flagging, especially when purchases increased on everything from durable goods, such as autos, to the least durable goods, food and drink at bars and restaurants,” said Robert Frick, corporate economist at Navy Federal Credit Union.
STUDENT LOAN REPAYMENTS COULD SLAM BIG-NAME RETAILERS THIS FALL
Sales rose in eight of 13 retail categories last month.
Still, Americans pulled back on spending on other items like electronics and appliances, garden supplies and clothing.
A solid job market and big wage increases have helped to buoy consumer spending in recent months, despite high inflation. However, many economists expect consumers to grow more cautious in the coming months as student loan payments resume and high interest rates continue to work their way through the economy. On top of that, more Americans are relying on their credit cards to cover necessities.
Credit card debt topped $1 trillion earlier this year while delinquencies surged to an 11-year high in August.
“Consumers were on fairly solid footing as they entered the final quarter of the year,” said Jeffrey Roach, chief economist at LPL Financial. “However, investors need to look underneath the sales figures to get a better look on the health of the consumer. Rising use of credit and early signs of delinquencies could dampen some of the enthusiasm.”
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