Economists had anticipated a 0.3% increase in overall retail sales, making October’s performance marginally stronger than expected. Yet, the data points to waning momentum, with core retail sales revealing a softer trajectory for consumer spending, a key driver of GDP growth.
Consumer Spending and Economic Impacts
Consumer spending rose at a robust 3.7% annualized rate in Q3, contributing significantly to the economy’s 2.8% expansion. This strength is underpinned by historically low layoffs, healthy household balance sheets bolstered by a stock market rally, and elevated home prices. Additionally, Bank of America data suggests spending resilience across income groups, with higher-income households leading in discretionary sectors like travel and entertainment.
Concerns persist that growth may be unevenly distributed, with middle- and upper-income households disproportionately contributing to consumption. Despite…
Read More
