Americans spent a bit more at retailers last month, providing a small boost to the economy just as the Federal Reserve considers how much to cut its key interes
t rate.
The impact of inflation and consumers' health has been an ongoing issue in the presidential campaign, with former President Donald Trump blaming the Biden-Harris administration for the post-pandemic jump in prices. Vice President Kamala Harris has, in turn, charged that Trump's claim that he will slap 10% to 20% tariffs on all imports would amount to a "Trump tax" that will raise prices further.
The Fed could provide a further boost to consumers and the economy by lowering borrowing costs. It is likely to reduce its key rate at its meetings in November and December as well as on Wednesday. Such cuts should, over time, lower rates for mortgages, auto loans, and credit cards. Average mortgage rates have already fallen in anticipation of the Fed's actions.
Gas stations reported a 1.2% drop in sales, which mostly reflected a decline in prices last month. Auto sales also ticked lower.
Consumer Resilience Inflation Federal Reserve Interest Rates Online Retailers Economic Growth Discretionary Spending
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