Retail spending in the U.S. rose by 0.4% from August to September, marking three consecutive months of increases. Higher sales occurred at online retailers, restaurants, and grocery stores, while gas station sales declined. Retail sales data is not adjusted for inflation, which showed a slight decrease overall. Despite cooling inflation, household spending continues to support economic growth. Sales increased in clothing stores, department stores, and sporting goods outlets, but declined in electronics and furniture retailers. Consumer prices rose by 2.4% in September year-over-year, down from a peak of 9.1% in June 2022. The Federal Reserve reduced its benchmark interest rate for the first time in four years. Experts indicate that lower inflation and borrowing costs may stabilize the economy further. Spending patterns highlight a disparity: upper and middle-income earners drive increased retail sales, while lower-income households struggle with rising prices and interest rates. The holiday shopping season is expected to see a spending increase of 2.5% to 3.5%, with retailers adjusting marketing strategies and promoting holiday merchandise earlier to entice consumers.
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