Persistently high inflation and rising interest rates forced many households to spend more cautiously.
A woman wheels a cart with her purchases out of a Walmart on Nov. 18, 2020 in Derry, New Hampshire.Washington — The pace of sales at U.S. retailers was unchanged last month as persistently high inflation and rising interest rates forced many households to spend more cautiously.
Lower gas prices likely allowed some shoppers to increase their purchases of other items. Gasoline sales plunged 1.8%, reflecting the drop in pump prices. The government’s monthly report on retail sales covers about a third of all consumer purchases and doesn’t include spending on most services ranging from plane fares and apartment rents to movie tickets and doctor visits. In recent months, Americans have been shifting their purchases away from physical goods and more toward services, like travel, hotel stays and plane fares.
The impact of the Fed’s hikes has been felt especially in the housing market. Sales of previously occupied homes have slowed for five straight months as higher mortgage rates and high sales prices have kept many would-be buyers on the sidelines. But the company is benefiting from higher-income shoppers who have been trading down to Walmart to try to reduce their grocery bills. The company, long associated with price-conscious and lower-income consumers, disclosed that roughly 75% of its grocery sales last quarter were to households with incomes of at least $100,000.
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