Retail Sales Growth Beats Expectations Despite Shoppers' Stretched Budgets

Retail sales rose 0.7% in September, exceeding economists' expectations. Spending remained resilient despite inflation and other economic headwinds.

Sales at restaurants, online retailers, and general merchandise stores saw solid gains. Categories like electronics and home furnishings were flat or declined.

Persistent consumer spending could lead the Fed to raise interest rates further to cool the economy. Shoppers' finances are being stretched thin by inflation.

Hiring was strong in September, defying higher interest rates. This suggests the economy may not slow as much as expected in Q4.

Retailers are offering deals and incentives to motivate holiday shopping as they worry about shoppers' finances. Best Buy launched an app-only early access holiday sale.