U.S. retail sales growth slows in October as consumer price strain builds

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Retail sales growth slows in October

Highlights

Total U.S. retail spending rises 0.2% month-over-month and 3.6% year-on-year in October, marking the slowest monthly gain since November 2025.
Core retail sales excluding restaurants increase 0.3% to $454.2 billion, with year-on-year growth in nine sectors led by electronics and appliances up 9.3%.
The consumer price index rises 0.4% in October while 37% of businesses plan price hikes in the next three months, signaling sustained inflation pressures impacting spending and retail strategy.

October retail spending data and category shifts

As reported by CNBC, citing NRF Retail Monitor data released Wednesday, total retail spending rises 0.2% from the prior month and 3.6% from a year earlier, marking the slowest monthly gain since November 2025. The National Retail Federation says a strong Halloween season and an early start to holiday promotions help prevent an even weaker result.

Core retail spending, which excludes restaurant spending, increases 0.3% month over month to $454.2 billion and stands 3.4% above a year earlier. Matthew Shay, chief executive of the National Retail Federation, says households are managing budgets carefully and timing purchases around offers and sales events to stretch spending power.

Spending rises in nine of 11 sectors from a year earlier, led by electronics and appliances with a 9.3% increase over the 12-month period. By contrast, furniture and home furnishings sales fall 0.2% in October and are down 2.6% from a year earlier, while spending on leisure goods including sporting goods, music and bookstores declines 0.4% on the year despite a monthly uptick from September.

Inflation pressures and wider economic implications

The October figures add to signs that higher inflation and rising prices are still weighing on U.S. consumers, whose spending makes up most of the country’s economic output. Price increases in technology products, from MacBooks to Xboxes, are also feeding into retail patterns as companies respond to higher memory chip costs tied to the artificial intelligence boom.

The Bureau of Labor Statistics reports that the consumer price index rises 0.4% in October, slightly above economists’ forecasts for the month. A separate National Federation of Independent Business survey also shows a net 37% of businesses plan price increases over the next three months, the highest share since July 2022.

Inflation and living costs remain central issues for households and voters after last week’s midterm election, which results in one of the largest shifts in U.S. political power in recent history. Together, the data points suggest retailers may need to rely further on promotions and value pricing during the holiday shopping period.

We have also analyzed the Walmart stock upgrade as inflation boosted the retailer’s value appeal and digital expansion narrative.

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