WASHINGTON – Americans increased their spending significantly last month, pushing up retail sales and boosting the economy. Much of the gain reflected the fact that shoppers also pay higher prices.
Retail sales rose a seasonally adjusted 1.7% in October from September, the U.S. Department of Commerce said Tuesday. That is an increase from 0.8% in the previous month.
Solid employment, strong wage increases and healthy savings for many households support robust spending. Americans are also buying more and more cars, furniture and other goods than they did before the pandemic, which is overwhelming US ports and shipping companies and pushing up prices.
Tuesday’s retail sales figures are not adjusted for inflation, which rose 0.9% in October, the government said last Wednesday.
Companies and other employers are rapidly increasing wages to fill an almost record number of job vacancies. Wages rose in the quarter July-September, compared with a year earlier, with the largest in 20 years. It gives more Americans extra money to spend.
Yet inflation has eroded these gains for most Americans. Prices rose 6.2% in October from a year earlier, the government said, Wednesday the most in 31 years.