Economy

Retail sales unexpectedly rise in September as consumers keep spending

Consumers spent at a much faster pace than expected in September, defying expectations for a pullback amid pervasive supply chain problems, the Census Bureau reported Friday.

Retail sales for the month increased 0.7%, against the Dow Jones estimate for a decline of 0.2%. Excluding auto-related sales, the number rose 0.8%, better than the 0.5% forecast.

Compared to a year ago, sales were up 13.9% on the headline number and 15.6% ex-autos.

The increase came during a month when the government ended the enhanced benefits it had been providing during the Covid-19 pandemic and against forecasts that growth would slow in the third quarter due to the delta spread and a perceived pullback in consumer activity.

But with coronavirus cases continuing to drop, spending accelerated.

Sporting goods, music and book stores led the way with a 3.7% increase. General merchandise increased 2% while miscellaneous retailers rose 1.8%. As gas prices pushed higher, spending at fuel stations jumped 1.8%, for a 38.2% surge over the past year.

Food and beverage spending increased 0.7%, though restaurants and bars saw a gain of just 0.3%, a sign that fears over the virus may have kept some people at home. Food and drinking establishment spending is up 29.5% over the past year.

The spending increases persisted against a backdrop of unexpectedly resilient inflation, which is running around 30-year highs. The consumer price index, which measures the cost of a variety of goods and services, rose another 0.4% in September and is up 5.4% from a year ago, though the gain was smaller when stripping out food and energy.

This is breaking news. Please check back for updates.

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