U.S. Retail Sales Slow as Consumer Confidence Wanes Amid Price Hikes

U.S. retail sales grew less than anticipated in September, indicating consumer fatigue due to rising prices. Despite this, economists expect robust third-quarter growth. Tariffs are affecting middle and lower-income households, resulting in a K-shaped economy, as high-income individuals continue to drive spending.

U.S. retail sales showed a modest increase in September, signaling a decline in consumer enthusiasm as prices surge. The report, issued by the Commerce Department, fell below economists' predictions but still supports strong third-quarter economic growth forecasts.

Higher prices, including those induced by tariffs, are primarily impacting middle and lower-income consumers, fostering a K-shaped recovery where affluent households propel spending. In September, sales at dining establishments grew, seen as a bellwether of household financial health.

The labor market remains sluggish with unemployment reaching a four-year high. As retail sales momentum shifts into the fourth quarter, the economic landscape continues to be shaped by both high-frequency data and consumer sentiment.

(With inputs from agencies.)