Customers shop at GU Co. In the SoHo neighborhood of New York, US, on Friday, October 7, 2022.
Gaby Jones | Bloomberg | Getty Images
Consumer spending was flat in September as prices rose sharply and the Federal Reserve applied higher interest rates to slow the economy, according to government figures released Thursday.
Retail and food service sales changed little in the month after rising 0.4% in August, according to an advance estimate from the Commerce Department. That was below Dow Jones’ estimate of a 0.3% gain. Excluding automobiles, sales were up 0.1% versus an unchanged estimate.
Given that the retail sales numbers were not adjusted for inflation, the report shows that real spending across the range of sectors covered by the report fell for the month.
A report by the Bureau of Labor Statistics on Thursday indicated that consumer prices rose 0.4% including all goods and services, and 0.6% excluding food and energy.
Diversified convenience store retailers saw a 2.5% drop during the month, while gas station prices fell 1.4% as energy prices fell.
A large number of other sectors also recorded a decline, including sporting goods, hobbies, books and music, as well as furniture and home furnishing stores, both of which recorded a decline of -0.7%, while electronics and appliances decreased by 0.8% and cars and vehicles. Parts dealers fell 0.4%.
General store sales of merchandise increased 0.7%. Also among the gainers were online stores, bars, restaurants, clothing retailers, and health and personal care stores, which all saw a 0.5% increase.
While this month’s gains were muted, retail sales were up 8.2% from a year ago, in line with the rise in the Consumer Price Index. Shoppers are still generally flocking to cash though lately there have been indications that they are indulging in savings to make ends meet.
The Fed has raised interest rates several times with the aim of reducing inflation and rebalancing the economy. Markets expect the central bank to raise interest rates by an additional 1.5 percentage points through the end of the year.
A separate report Thursday showed that import prices fell 1.2% in September, up slightly from an estimate of 1.1%. Exports fell 0.8%.
Originally published at San Jose News Bulletin
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