US retail prices surge high in October!
According to Reuters, retail sales jumped 1.7% last month, the largest gain since March, after rising 0.8% in September. It was the third straight monthly advance and topped economists’ expectations for a 1.4% increase.
Sales soared 16.3% year-on-year in October and are 21.4% above their pre-pandemic level.
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The report from the Commerce Department on Tuesday suggested high inflation was not yet dampening spending, even as worries about the rising cost of living sent consumer sentiment tumbling to a 10-year low in early November.
Rising household wealth, thanks to a strong stock market and house prices, as well as massive savings and wage gains appear to be cushioning consumers against the highest annual inflation in three decades.
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“It’s more important to look at what consumers do than what they say,” said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania. “They are concerned about higher inflation, but they are still in good shape and are continuing to spend.”
October’s broad increase in sales partly reflected higher prices as monthly consumer inflation surged 0.9% in October, which boosted the annual rate to 6.2%.
US retail sales surged 1.7% mom in October of 2021, above an upwardly revised 0.8% rise in the previous month and beating market forecasts of 1.4%. It is the strongest gain since March, as consumers spend more on early holiday shopping and gasoline.
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Sales at nonstore retailers recorded the biggest increase (4%), followed by sales at gasoline stations (3.9%); electronics and appliance stores (3.8%); miscellaneous store retailers (2.8%).
Building materials and garden equipment rose by 2.8%; followed by motor vehicles dealers (1.8%); sporting goods, hobby, musical and book stores (1.5%); food and beverages (0.9%); general merchandise stores (0.8%); and furniture stores (0.4%).
On the other hand, sales were flat for food services and drinking places and declined 0.7% in clothing stores and 0.6% for health and personal care. Excluding autos, sales were up 1.7% and excluding gasoline rose 1.5%
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Retail sales are mostly made up of goods, with services, including healthcare, education and hotel accommodation, making up the remaining portion of consumer spending.
The nearly two-year long COVID-19 pandemic has caused an acute shortage of labor, delaying deliveries of raw materials to factories as well as shipments of finished goods to markets.
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