COVID-related caution, rising prices and widespread supply-chain disruptions failed to tamper spending as U.S. retail sales rose a better-than-expected 0.7% in September, recording the second month of gains. Economists had actually predicted a drop of 0.2% for the month.
Compiled once a month by the Commerce Department, retail sales measure everything from food service and retail stores. Consumer spending accounts for two-thirds of gross domestic product, so retail sales is considered an accurate measure for gauging the economic health of the U.S.
Hidden behind the number is rising costs—prices advanced 0.4% from August, and 5.4% from last year according to U.S. Labor Department data.
Where were consumers spending their money? While the auto industry continued to feel the fallout from supply chain disruptions, auto sales rose 0.5% for the month. And the energy crisis reared its head as gas prices pushed higher, with spending at fuel stations up 1.8%.
Essentials such as food and beverages increased 0.7%. A return to school and after-school sports helped sales of sporting goods, music and book stores lead the way, up 3.7%.
Worries about the Delta variant did peak, though as consumers stayed home and shopped (online sales up 0.6%) instead of going out (restaurants and bars rose just 0.3%.)
Heading into the holidays—and the North American winter—how will supply chain issues and energy prices impact spending?
