The month of October saw a jump in three leading consumer metrics—inflation, price gains and overall retail sales.
According to the U.S. Labor Department Consumer Price Index for All Urban Consumers, inflation increased 0.9 percent in October, following a modest increase of 0.4 percent in September. The all items index, which measures overall price increases, jumped 6.2 percent over the last 12 months, the biggest increase since 1990.
Looking at individual categories, the energy index rose 4.8 percent, the gasoline index increased 6.1 percent and the index for all items less food and energy jumped 0.6 percent.
The increase in inflation and costs mixed with continuing supply chain issues continue to cause headaches for businesses and the federal government but has not led to a drop in spending on the part of consumers. The U.S. Census Bureau reported a 1.7 percent increase in seasonally adjusted overall retail sales and a 16.3 percent increase year-over-year. Building materials and garden supply stores were up 2.8 percent month-over-month seasonally adjusted and up 6.5 percent unadjusted year-over-year.
The National Retail Federation (NRF) attributes the increase to consumers starting their holiday shopping early in light of supply issues.
“Retail sales data for October reflects the enduring strength of consumers’ finances and willingness to spend as the holiday season gets underway,” NRF President and CEO Matthew Shay said. “The robust balance sheets of American households are being met by retailer preparation and hard work to provide products that consumers want at competitive prices. Despite significant challenges including supply chain issues, labor shortages, rising inflation and OSHA’s impending employer vaccine mandate, retailers are continuing to safely serve consumers online and in stores. Today’s numbers show that consumers are getting a jump on their holiday shopping. We continue to urge consumers to shop early and shop safely, and we fully expect this holiday season to be one for the record books.”
Discover three ways to combat supply chain issues in your operation here and how several retailers adjusted their inventory management strategies in light of increasing prices and supply chain issues here.