US Retail Spending Remains High

 

Over the past month, US retail sales remained high, despite the scarcity in some goods sectors as well as rising inflation.

The US Department of Commerce (Depdag) reported on Tuesday (16/11), retail sales throughout October 2021 rose 1.7%. This reflected the biggest monthly spike since March 2021 and exceeded expectations.

Auto sales rose 1.8% although stocks remained scarce and prices rose due to a global semiconductor shortage. Meanwhile, fuel sales rose 3.9% in line with rising global energy prices.

This report indicates consumer resilience in the US heading into the year-end holiday season. At a time when inflation is rising to its highest level in 30 years and supply chain crises are making some desirable goods hard to come by.

“The Covid situation is improving, supply barriers are easing in the auto sector and the start of the shopping season has boosted consumer spending last month,” said Gregory Daco, an economist at Oxford Economics.

However, sales in the bar and restaurant sector were flat last month. Meanwhile, sales in the healthcare and personal care sectors, as well as fashion retail, fell.

Non-store retailers such as online shopping companies posted a 4% increase in sales. Meanwhile, electronics and household equipment stores showed an increase of 3.8%. University of Michigan last week reported that the sentiment index

US consumers fell to their lowest level in 10 years. Ian Shepherdson of Pantheon Macroeconomics said retail sales showed that what people do is far more important than what they say.

“We expect the holiday season to be booming as people make up for lost time and start spending a total of US$2.5 trillion in savings since the start of the Covid-19 pandemic,” he said.

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