Consumer spending reportedly grew faster than expected in September. This report goes against the expectations of analysts who are targeting the decline.
September retail sales rose 0.7% compared to Dow Jones estimates that targeted a 0.2% decline. Regardless of automotive sales, retail sales rose 0.8% more than the forecast of 0.5%.
Compared to last year, retail sales have increased by 13.9%. The increase in September comes amid the government is planning to reduce the stimulus given during the Covid-19 pandemic. This increase also carries an indication that the economy continues to grow even amid the contagion of delta variants.
The declining decline in Covid-19 cases pushed spending on sporting goods, music and bookstores ahead with a 3.7%increase. Merchandise rose 2% while other retailers rose 1.8%.
Food and beverage spending increased 0.7%, although spending involving restaurants and bars only recorded an increase of only 0.3%. This shows that the people are still worried about the spread of the pandemic. However, there are doubts that the strengthening of retail sales will continue.
Economic analyst at Capital Economics Andrew Hunter thinks that service spending is likely to increase due to the reduction in Covid cases. But the shortage of goods is likely to continue, along with rising prices.
It can be concluded that the increase in spending is in line with the increase in inflation which has risen to the level of 30 years. There are still concerns that supply problems will hamper the progress of the holiday spending season.
The US dollar index, which measures the US currency against six major currencies, traded 0.06% stronger at 94.017 after the report was released.
