Americans stepped up their purchases at retailers last month as low unemployment, steady pay gains, and rising stock and home values helped sustain their willingness to spend despite higher prices, the Associated Press reports. Not all consumer groups were contributing to this trend, however.
Retail sales rose 0.4% from August to September, the Commerce Department said today, up from 0.1% the previous month and the third straight increase. Online retailers, restaurants, and grocery stores all reported higher sales.
Sales at gas stations fell because of lower pump prices. The retail sales figures aren’t adjusted for inflation, and the prices of goods went down slightly last month.
Today’s figures provided the latest sign that household spending is fueling a steady economic expansion even while inflation has cooled. Clothing stores, department stores, and sporting goods outlets all reported higher retail sales last month. Purchases dropped at electronics and furniture sellers.
Still, research by the Fed has found that it’s mostly upper- and middle-income Americans who are driving the increased retail spending by consumers. Many lower-income households, by contrast, have struggled to keep up with sharply higher prices and interest rates, and have increased their spending by much less.
The lagging outcome for lower-income consumers marks a shift from before the pandemic, when retail spending reportedly rose for all income groups at roughly the same pace.
