Consumer spending in the United States remains resilient according to the Census Bureau data for October. The retail sales in October jumped higher than expected, while the September numbers saw significant revisions.
In October, the retail sales rose by 0.4% compared to 0.3% expected by economists. On the other hand, September saw an increase of 0.8% after the revision.
The surge in retail sales for the past month is partly attributed to rising prices, but economists agree that the main reason is simple: increased spending. Electronics and appliances stores and auto dealers have been the main drivers of the jump, rising 2.3% and 1.6%.
Some sectors, on the other hand, saw a moderate decline, including furniture stores, clothing stores, and pharmacies.
“The solid rise in retail sales in October comes on the heels of a sharply revised higher spending splurge in September, which indicates that consumers maintained upbeat spending momentum at the start of Q4,” Kathy Bostjancic, Chief Economist at retail banking company Nationwide, said. “This supports our forecast that GDP growth expands a solid 2% this quarter, albeit a moderation from the 2.8% growth in Q3.”
The increased spending isn’t expected to spill over to next month and result in a robust holiday shopping season. Americans still remain vary of inflated prices and will likely be cautious with their holiday spending.