Business

Consumer spending reaches record high in October: report

by Julia Shapero - 12/04/23 4:19 PM ET

FILE - A man pushes a shopping cart outside a supermarket in Gelsenkirchen, Germany, on May 31, 2023. Inflation in Europe slid again in June but fell too slowly to offer much relief to shoppers grumbling over price tags or to stop more interest rate hikes that will raise the cost of borrowing across the economy. (AP Photo/Martin Meissner, File) — FILE – A man pushes a shopping cart outside a supermarket in Gelsenkirchen, Germany, on May 31, 2023. Inflation in Europe slid again in June but fell too slowly to offer much relief to shoppers grumbling over price tags or to stop more interest rate hikes that will raise the cost of borrowing across the economy. (AP Photo/Martin Meissner, File)

Consumer spending in the U.S. reached a record high in October, according to a recent analysis of federal data by the personal finance site WalletHub.

Americans spent $1.57 trillion in October, up $4.04 billion from the month before, WalletHub’s consumer spending report found.

This represents the highest spending total for a single month since 2010, according to the report, which is based on inflation-adjusted data from the Bureau of Economic Analysis.

“Despite monthly totals setting records, recent spending does not seem to be unusually reckless, considering that metrics such as the ratio between spending and income are in line with historical averages,” WalletHub editor John Kiernan said in a statement.

Consumers spent just over 81 percent of their monthly income in October, up from the pandemic’s record lows but in line with pre-pandemic spending, according to the report released on Thursday.

Americans’ propensity to consume, or how much they spend for each additional dollar earned, also remains below the historical average, the report noted.

“The overall takeaway is that even though consumers are spending more than ever, a lot can be chalked up to high inflation, low unemployment and an economy that’s stronger than you might think,” Kiernan added.

After reaching a 40-year high of 9.1 percent last summer, inflation has steadily cooled, falling to 3.2 percent this October.

Easing inflation has sparked optimism that the Federal Reserve, which has repeatedly raised interest rates in an effort to slow the economy and tame inflation, may be nearing an end to its rate hikes.

While inflation remains above the Fed’s 2-percent target and officials have repeatedly warned that the central bank could still hike rates further, it has held interest rates steady at a range of 5.25 to 5.5 percent at its last two consecutive meetings.

Tags consumer spending federal reserve inflation Interest rates