Retail sales rose 0.7% last month after a nearly 1% gain in August, the government said Friday. The Wall Street Journal analysts polled by The Wall Street Journal forecast 0.2% decline.
The government said sales rose in most major categories, including auto dealers, even though car purchases slowed due to major production delays last month. Automobile manufacturers can't produce enough vehicles because of the shortage of computer chips.
Auto sales actually fell for the month of May on an unadjusted basis, but the government's seasonal adjustment process turned a big decline into a small increase.
Despite cars being excluded, the U.S. retail sales did only up 0.8% in the month.
American economy has plenty of money to spend because of high savings, government stimulus and tight labor market in which wages are rising sharply.
I figure out what to spend the money on but it gets difficult. The surge in delta cases towards the end of the summer caused more people to spend less on services such as eating out, renting a room or getting on a plane.
Yet many goods such as cars and consumer electronics are in a short supply and that s leading to sharply higher prices The inflation rate in the United States is at the fastest pace in 30 years.
Read: Inflation continues at a 5.4% yearly pace, CPI shows, and rises in 30 - year high - rate.
Also: High inflation will last awhile, Fed s Bostic says, and it is no longer transitory The effect of this is to partially exaggerate the strength of consumer spending, the lifeblood of the U.S. economy
Higher prices for consumer goods have been acting to inflate measured retail sales, said Chief Economist Richard Moody of Regions Financial.
Market response: The Dow Jones Industrial Average DJIA and the S&P 500 SPX were set to open higher in trades on Friday.