Consumers spent at a much faster pace than expected in September, with retail sales rising 1.9% in a sign that the U.S. economy’s biggest driver remains healthy.
Economists surveyed by Dow Jones expected sales to rise 0.7%, up from a 0.6% rise in August.
Clothing and accessories led the gains, rising by 11%, while sporting goods, music and books jumped 5.7%. Electronics and appliances was the only major sector that was negative, dropping 1.6% from the August levels.
The unexpectedly big gain in spending comes after months of historically high savings as consumers retrenched due to the Covid-19 scare. The personal savings rate peaked at 33.6% in April and remained at 14.1% in August, the highest pre-pandemic rate since June 1975.
“The strength in August sales is welcome, and consumers in aggregate have the resources — in the form of the huge increase in savings deposits built up since the spring — to finance a strong holiday season,” wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics.