Retail sales rise faster than expected in October, despite painfully high inflation
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Spending at retail stores rose faster than expected in October as consumers continue to open their wallets despite scorching-hot inflation
Retail sales, a measure of how much consumers spent on a number of everyday goods, including cars, food and gasoline, rose 1.3% in October, the Commerce Department said Wednesday. Economists surveyed by Refinitiv expected sales to increase 1%.
That is a marked increase from the September data, which showed that retail sales were stagnant.
The October advance is not adjusted for inflation – which rose 0.4% last month – meaning that consumers may be spending the same but getting less bang for their buck.
"Although Target reported disappointing third quarter results, the October retail sales report underscores that a more discerning U.S. consumer continues to spend," said Quincy Krosby, chief global strategist for LPL Financial. "While credit cards are being used more frequently, consumers are taking advantage of earlier-than-usual holiday sales."
INFLATION MAY HIT SOME RETIREES TWICE
When excluding spending on autos, sales edged up 0.1% in September. Excluding autos and gas, sales rose 0.3%.
The Federal Reserve has responded to the inflation crisis with the most aggressive action in decades as it races to catch up with runaway consumer prices.
Policymakers approved four back-to-back 75-basis-point interest rate hikes in June, July, September and November, and have indicated that additional super-sized increases are on the table at upcoming meetings if inflation remains abnormally high.
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Rising interest rates could force consumers to pull back on spending.
This is a developing story. Please check back for updates.
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