Retail sales climb despite rising prices, supply issues

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Americans continued to spend at a solid clip in September even while facing sticker shock in grocery aisles, car lots and restaurants as snarled global supply chains slow the flow of goods.

Retail sales rose a seasonally adjusted 0.7% in September from the month before, the U.S. Commerce Department said Friday.

That was a stronger showing than expected. Yet there are lingering concerns as to how resilient shoppers will be if prices continue to head north and shortages lead to frustration heading into the crucial holiday season.

Consumer spending drives about 70% of all U.S. economic activity and a sustained recovery from a pandemic-induced recession will require their participation.

There is no evidence that Americans are pulling back, however, and spending last month was heavy everywhere, from clothing, sporting goods and toy stores to car lots.

“They are coming to enjoy the experience with their families that they hadn’t been able to do in a long time,” said Tiffany Markofsky, chief communications officer at a small toy store chain called Camp.

Some of the increased spending by consumers is the direct result of spiking prices. A gallon of gasoline today costs about $1 more than it did at this time last year so in many cases, Americans aren’t buying more, they’re just paying more.

The U.S. reported this week that the prices consumers pay rose 0.4% in September, and they’re up 5.4% over the past 12 months, matching the fastest pace since 2008. Gasoline, furniture, cars and trips to the grocery store or restaurant have all grown more expensive.

While the spending increases have been broad, the delta variant had has an influence on where Americans are spending money, with more dollars devoted to buying things, rather than plane tickets or dinners out.

The monthly retail report covers only about a third of overall consumer spending, however, and doesn’t include services such as haircuts, hotel stays and plane tickets.

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