Retail Sales Explode Higher, Raising Inflation Risks

Sales at U.S. retailers soared much more than expected in September, indicating resilient household demand and suggesting that the Federal Reserve may have more work to do to tame inflation.

Retail sales jumped 0.7 percent in September, the Commerce Department said Tuesday. Retail sales represent about one-third of all consumer spending in the U.S. and are considered a key leading indicator for the direction of the economy.

The sales figure was much stronger than expected, topping even the most bullish forecasts. The median forecast of economists polled by Ecoday was for sales growth of 0.3 percent, with a range of -0.1 percent to 0.5 percent.

Core retail sales, which exclude sales at gas stations and motor vehicles, rose 0.6 percent. These were expected to grow just 0.1 percent, with a range of forecasts from -0.5 percent to 0.3 percent. Excluding only auto dealers, sales rose 0.6 percent, above the 0.2 percent consensus forecast.