STORY: Despite a barrage of warnings from the nation’s biggest retailers about what they expect to be a soft holiday shopping season -- U.S. consumers, at least for now, continue to spend.
U.S. retail sales came in stronger than expected in October -- rising a solid, 1.3 percent -- as households stepped up purchases of a range of goods, despite persistently high inflation.
Claire Tassin is a Retail and e-commerce analyst.
“So, today's October U.S. retail sales report just shows the ongoing resilience of the U.S. consumer. U.S. shoppers continue to absorb higher prices, particularly in gas and groceries and continue to spend on discretionary items as well. At the same time, we know that U.S. shoppers are leaning on savings and credit card debt in order to continue to afford these higher prices. So, seeing inflation start to come down is absolutely necessary for continued resilience among consumers.“
And there might be signs of just that.
Recent inflation reports have shown price pressures beginning to ease.
Possible evidence that the campaign by the U.S. Federal Reserve to fight inflation might finally be bearing fruit.
That trend, combined with Wednesday’s retail sales report, has some economists starting to voice cautious optimism that the economy could avoid an anticipated recession next year or experience only a mild downturn.
Still, in the short term, the traditionally strong holiday shopping season could be challenging, Tassin says, with consumers searching for deals.
“When we're surveying consumers about the upcoming holiday season, they're telling us that they're hoping to keep their spending relatively flat from 2021, which does mean that people will be getting less bang for their buck."
The National Retail Federation forecast that holiday sales would grow between 6 and 8 percent this year --
down from 13.5 percent in 2021.