U.S. shoppers accelerated their level of spending in October even as the prices of goods jumped at their fastest pace since the 1990s, the Commerce Department reported Tuesday.
Retail sales, a measure of how much consumers spent on goods ranging across categories from autos to sporting goods and food and gas, increased 1.7% for October, compared with 0.8% the previous month.
Excluding autos, sales also increased 1.5%, according to the Census Bureau advance estimate.
The two numbers were above the Dow Jones estimates of 1.5% for the headline print and 1% for the core sales gain.
Online shopping posted the biggest relative gain for the month, rising 4% and good for a 10.2% gain from a year ago. Soaring prices at the pump pushed gasoline sales up 3.9% in October. Year over year, sales increases at stations have surged 46.8%.
The news comes after the consumer price index, measuring a similar basket of goods, increased 0.9% for October and 6.2% year over year. That year-over-year gain was the strongest since 1991. Even excluding food and energy, the CPI was up 0.6% from the previous month and 4.6% year over year.
However, the retail sales numbers — which are adjusted for seasonal variations but not for inflation — indicate consumers are willing to pay the higher prices.
U.S. households have been flush with cash, thanks to a series of payments Congress approved to combat the pandemic crisis. The spending as totaled more than $5 trillion and included transfer payments in the form of direct checks to the millions of Americans, as well as enhanced unemployment benefits, most of which expired in September.
Savings totaled $1.6 trillion in the third quarter, well off the pandemic peak but still at a high level. However, worries over inflation have been creeping up in sentiment surveys.
Spending has remained brisk, however, with debt and credit card outlays up 27% on a two-year basis, according to Bank of America.
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