Sat, 26 Nov 2022

WASHINGTON D.C.: In October, U.S. shoppers increased their spending, despite prices rising at their fastest levels since the 1990s, the Commerce Department announced on Tuesday.

Retail sales rose 1.7 percent in October, compared with 0.8 percent in September.

According to the Census Bureau's advance estimate, excluding autos, sales increased by 1.7 percent.

Online shopping posted the highest relative gain for October, increasing 4 percent and a 10.2 percent gain from last year. Rising fuel prices pushed gasoline sales up 3.9 percent in October, with year-over-year sales at stations surging 46.8 percent.

The news came after the consumer price index, which measures a similar basket of goods, increased 0.9 percent for October and 6.2 percent year-over-year, reporting its best performance since 1991.

Even without accounting for food and energy, the CPI was up 0.6 percent from the previous month and 4.6 percent year-over-year.

These retail sales numbers, adjusted for seasonal variations but not for inflation, indicate consumers are willing to pay higher prices.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, noted, "So much for soft consumer confidence signaling slower growth. What people do is much more important than what they say," as reported by the USA Today.

U.S. households currently are holding high levels of cash, due to a series of payments approved by Congress to alleviate the crisis caused by the COVID-19 pandemic.

Spending has totaled more than $5 trillion, including transfer payments in the form of direct checks to millions of Americans and higher unemployment benefits.
In the third quarter, savings totaled $1.6 trillion, well below the peak of the pandemic, but still at a high level.

Additionally, the Bank of America said spending has remained brisk, but credit card and other debt rose 27 percent on a two-year basis. Overall, sales increased 16.3 percent on a year-over-year basis.

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