U.S. retail sales increased 0.8% month-over-month in September, significantly outpacing the 0.3% growth expected by analysts. The U.S. Census Bureau report also showed that core retail sales, which exclude automobiles, surged by 1.4%, far exceeding the 0.5% consensus estimate. Additionally, August’s headline growth was revised upward to 1.3% from the previously reported 1.2%, signaling sustained consumer demand despite elevated interest rates and persistent inflationary pressures.
Market reaction was mixed; while the robust spending data typically supports the U.S. dollar, the greenback initially faced pressure as Treasury yields retreated from recent peaks. Investors are weighing the strong demand against a cautious Federal Reserve, with the data bolstering the case for a restrictive policy stance or a potential rate hike before year-end.