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Consumer spending rose in September despite economic uncertainty

By Jake Thomas
1/5
Consumer spending rose in September despite economic uncertainty
Golf fans shop the massive Ryder Cup store during the 43rd Ryder Cup at Whistling Straits in September. Consumer spending rose in September despite economic uncertainty, federal numbers release Friday show. Photo by Mark Black/UPI | License Photo

Oct. 15 (UPI) -- Inflation, supply chain problems and reduced government payments couldn't beat back demand from consumers who spent more money than expected in September.

Consumer spending rose by 0.7% from the previous month totaling $625.4 billion for September, according to new U.S. Census Bureau numbers released Friday. Sales are up 13.9% from a year ago.

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Excluding auto sales, September saw a 0.8% increase in sales from the previous month. The increase is 15.6% from a year ago. September's numbers are a reversal from July's report that showed consumer spending declining by 1.1% overall and 0.4% excluding automobile purchases.

The Census Bureau's numbers are an unexpected bright spot amid uncertainty facing the U.S. economy.

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Stock markets were mostly flat earlier this week in response to the Federal Reserve's plan to pull back pandemic-related stimulus measures. September's monthly Consumer Price index showed that prices rose by 5.4% from a year ago, the biggest increase since 2008. Increased unemployment benefit payment, another pandemic stimulus measure, also ended in September.

Forecasters expected consumers to close their wallets amid the economic uncertainty and the surging Delta variant of the coronavirus, reports CNBC. Dow Jones estimated a 0.2% decline for September.

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"Students heading back to school and workers returning to the office are likely the catalysts for the increased retail sales," Natalie Kotlyar, national leader of financial advisory firm BDO's retail and consumer products practice, told CNBC.

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Sporting goods, music and book stores saw the biggest increase in spending at 3.7% in the most recent numbers. General merchandise rose 2% and miscellaneous retailers 1.8%. Gas prices also increased 1.8% from the previous month and saw the largest year-over-year increase at 38.2%.

Spending on electronics dropped by 0.9%. Health and personal care stores saw a 1.4% decrease.

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