American shoppers continue to power the US economy.
Spending at US retailers climbed 0.4% in September from the prior month, according to fresh government data released Thursday. That was much stronger than August’s 0.1% gain and was in line with what economists projected in a FactSet poll.
Retail sales were up across most categories last month, rising the most at specialty stores (+4%), clothing stores (+1.5%) and at health and personal care shops (+1.1%). Sales at bars and restaurants rose 1% last month. The figures are adjusted for seasonal swings but not inflation.
Spending at gas stations fell 1.6% in September, which was due to lower gas prices. Excluding those sales, retail spending was up a much stronger 0.6%. Sales of electronics and appliances declined the most in September, plunging 3.3% from August.
Consumer spending makes up about 70% of the US economy, with retail sales comprising a sizable chunk of that. Thursday’s report shows that Americans are still opening their wallets despite years of elevated inflation and interest rates that have only recently begun to come down from a bruising two-decade high.
The latest figures on retail spending represent another reassuring sign that America’s economy is nowhere near a recession. The Federal Reserve delivered a bold half-point rate cut last month, the first time the central bank has lowered interest rates in more than four years. Fed Chair Jerome Powell said the decision was in part to prevent the US job market from faltering.
This story is developing and will be updated.
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