Adding a yearly growth of 2.2%, American retail sales rose by 0.4% from August to September, signalling the economy's resilience. This marks the third consecutive month of positive growth, supported by favourable economic conditions. The Commerce Department lined this surge to factors such as low unemployment, consistent wage growth, and rising stock and home values, all of which have bolstered consumer confidence.
Nonetheless, even with persistently higher costs, areas like internet-based retail sales, dining establishments, and grocery stores marked substantial growth in sales, except for the gasoline stations, which indicated a decline in sales, given lower pump costs. These results come as the presidential election draws nearer, with economic programs and taxation blueprints dominating the political platforms.
Though inflation is seen easing with the 2.4% YOY increase in September, the Federal Reserve has stepped with a cut to its benchmark rate by half a point in the previous month, its first time in four years. More ease in the borrowing costs is expected, provided that another two rates are to be cut by the end of this year.
However, these healthy retail business numbers might pose a challenge to the Fed's rate cuts policy, especially following the 0.2% decline in the unemployment rate to 4.1% in the last month of the third quarter.
Nevertheless, such changing indicators are not progressive in equal measure within the country, and the pockets of economic growth are not all-inclusive. According to Federal Reserve studies, anticipations of increased expenditures are led by higher and middle-income consumers. In contrast, the lowest-income consumers are behind due to higher price and interest rate sensitivity.
Lifting the spirit of the holiday season, the National Retail Federation expects moderate to a strong upsurge in retail spending. As a result, Balsam Hill Michaels and other retailer outlets that sell art supplies and decorations have started early, hinting at their holiday promotions to target customers due to persisting financial hardships.
