US retail sales exceeded projections, raising hopes for third-quarter GDP growth

Sales for August increased by 0.8% as opposed to the 0.6% that had previously been reported

As families increased their purchases of automobiles and increased their spending at restaurants and bars, U.S. retail sales climbed more than anticipated in September, confirming hopes that economic growth would pick up in the third quarter. However, the report from the Commerce Department on Tuesday shows that demand is strong, which increases the likelihood that the Federal Reserve will increase interest rates in December. The figures were out shortly after September's higher-than-anticipated consumer price readings and employment growth. Because consumers aren't taking a break, the economy appears to be adjusting to the new normal of higher interest rates for longer, according to Christopher Rupkey, chief economist at FWDBONDS. Fed officials have another rate hike this year up on their forecast board, and they will need to use it if the economic data continues to surprise economists to the upside.

Last month, retail sales increased by 0.7%. Sales for August increased by 0.8% as opposed to the 0.6% that had previously been reported, according to revised data. Reuters polled economists who predicted a 0.3% increase in retail sales in September. The majority of retail sales are of goods and therefore are not inflation-adjusted. Credit cards are being used more frequently by consumers to pay for items. In October, millions of Americans began making their student loan payments again, amounting, according to analysts, to about $70 billion, or about 0.3% of disposable personal income.