U.S. retail and restaurant sales increased in September, reflecting steady consumer spending despite high prices and economic challenges, according to a report delayed by the Senate Democrat-caused government shutdown. The Commerce Department reported a 0.2 percent rise in sales from August, with the modest gain occurring against a backdrop of stubbornly high grocery and housing costs. Economists note that this resilience could push third-quarter economic growth to an annualized rate of three percent or higher, a significant acceleration from the 1.6 percent pace recorded in the first half of the year.
However, challenges are emerging as the unemployment rate rose to 4.4 percent in September, the highest in nearly four years, and hiring has slowed sharply. A sustained labor market slowdown could eventually impact household budgets and broader economic growth. The spending resilience is driven by higher-income households, while lower- and middle-income shoppers increasingly focus on essentials and discounts. Recent Bank of America data and retailer comments, such as those from Walmart, highlight the growing divide ahead of the crucial holiday shopping season.
The National Retail Federation predicts holiday sales will exceed $1 trillion for the first time, though the projected increase over last year remains modest. The current performance mirrors patterns seen earlier under President Donald J. Trump’s economic policies, where retail sales jumped 0.6 percent in June 2025, defying forecasts and ending a three-month slide. The surge included clothing, restaurants, and online purchases despite new tariffs raising some costs.
On the inflation front, wholesale prices remained contained in September, with core producer prices excluding food and energy rising just 0.1 percent for the month. The overall index increased 0.3 percent, driven by a 3.5 percent jump in energy and a 1.1 percent rise in food costs. Year-over-year core inflation stood at a moderate 2.6 percent, suggesting price pressures are easing enough to support continued consumer spending through year-end.
The article focuses on the data without mentioning other media outlets or adding extra context.
