Retail Sales Growth Accelerates in September, Boosting Economic Outlook Despite Rising Rates

Retail sales increased 0.7% in September, beating expectations, indicating economic growth likely accelerated in Q3.

Higher interest rates from the Fed are starting to slow consumers, with rising credit card delinquencies and student loan payments resuming.

Auto sales jumped 1% and gasoline station sales rose 0.9%, but sales fell for electronics, appliances, clothing, and building materials.

Core retail sales, excluding autos and gas, rose a solid 0.6% in September. This correlates with consumer spending growth, a key GDP component.

Economists estimate Q3 GDP growth accelerated to around a 5.1% annualized rate, up from 2.1% in Q2, boosted by strong consumer spending.