Retail Sales Rose in October, Despite High Inflation
November 16, 2021
Despite prices jumping at their fastest pace in decades, U.S. consumers accelerated their spending in October, according to the Commerce Department.
Sales at U.S retailers, restaurants, and online storefronts rose by a seasonally adjusted 1.7% in October, compared with a 0.8% increase the month prior. “Core” retail sales, which excludes things like cars and gasoline, also increased 1.7%. Both figures were above the Dow Jone estimates of a 1.5% overall increase and a 1% increase for core sales.
The month’s biggest gains were seen in online shopping, where sales climbed 4% for the month and are 10.2% higher than a year earlier. Surging gas prices also led to increased gasoline sales, which climbed 3.9% in October.
The news comes after the consumer price index increased 6.2% year over year in October, the fastest annual increase since 1991.
Retail sales are not adjusted for inflation, so some of the month’s increase can be attributed to higher prices, but retail analysts and economists take the strong sales numbers as a positive sign for the holiday shopping season and overall economic growth, of which nearly 70% is driven by consumer activity. The strong sales data comes after consumer sentiment’s recent fall to the lowest level in a decade, and suggest that even as prices rise, consumers seem willing to spend.