U.S. Retail Sales Surge Amid Economic Resilience

In September, U.S. retail sales saw a robust increase, likely fueled by decreased gasoline prices, allowing consumers to spend more on dining and personal care. Despite slowed labor market momentum, solid income growth and strong household balance sheets supported spending, contributing to a 3.4% GDP growth estimate for the quarter.

U.S. retail sales showed significant growth in September, bolstered by declining gasoline prices that left consumers with more disposable income. This boost was evident in increased spending at restaurants, bars, and health stores, according to a Commerce Department report released Thursday.

Economists noted a mix of factors supporting consumer spending, including solid income growth and strong household finances. Despite slower labor market momentum, layoffs remain historically low, helping to sustain wage increases. As a result, the Atlanta Federal Reserve adjusted its GDP growth forecast for the quarter to 3.4%, indicating strong economic resilience.

Retail sales, excluding volatile categories such as automobiles and gasoline, rose 0.7% in September, showcasing robust consumer activity. These figures are a key indicator for the Federal Reserve's economic easing measures, with expectations remaining for a potential quarter-point rate cut in upcoming months.

(With inputs from agencies.)