U.S. consumers aren’t letting higher prices stopping them from spending.
Core retail sales rose 1.7% in October from September and were up 10.8% year-over-year, according to the National Retail Federation. That compared with increases of 0.4% month-over-month and 10.9% year-over-year in September (NRF’s calculation of retail sales excludes automobile dealers, gasoline stations and restaurants.)
The October increase came as the prices of goods rose at their fastest pace since the 1990s, according to the U.S. Commerce Department said.Sales rose in all but two categories — clothing/accessory stores and health/personal care stores — on a monthly basis and were highest in online and electronics/appliance stores. Sales were up across the board year-over-year, led by increases at clothing, electronics and sporting goods stores.
“Consumers remain in high gear moving into the last months of the year,” said NRF chief economist Jack Kleinhenz. “While it’s difficult to parse out exact amounts, the figures reflect the combined effects of Halloween and early holiday shopping. Even though consumers may have begun shopping early to avoid inventory shortages, November and December are still when they do most of their holiday shopping, so much remains ahead of us.”
Kleinhenz noted that while concerns about high prices are weighing on consumer sentiment, that has not held back spending to date.
“As it has for more than a year-and-a-half, COVID-19 remains a significant factor should there be an increase in coronavirus infections that could cause a pullback in spending,” he added.