Here’s What We Bought In October

Based on the recent results, it looks like we’ve ‘mended the spend’ a bit since the most recent time we checked in.

Last week, the U.S. Census Bureau released monthly results tackling our spending in October. The monthly report is short but sweet and it outlines American consumer habits about how much we’re spending and where we are spending our money. If the past few reports have continued to show us anything, it’s that spiking gas prices, inflation, and market woes have taken a bit of a bite out of our confidence. But, with autumn and winter holidays in full swing starting with Halloween, is it safe to assume we’re spending on those little extras at long last? Let’s dig in and take a look.

Recall that last month, retail results were relatively flat across the board and to quote me, “consumers spoke up by not saying much at all.”

October saw a slight uptick in spending. The latest Consumer Tracker survey by John Blackledge and team at Cowen noted that the chill has thawed some with consumers spending, but “spend cutting remains well above May-Aug levels.”

So, what, then, did we buy in October?

Up first, let’s note that the total spending numbers for retail and food services rose to $694,518 billion from roughly $685 billion in both September and October. Neil Saunders, Managing Director of GlobalData, explains, “consumers continue to defy gravity as spending on retail increases apace. However, while the headline numbers tell a story, they do not reveal the general mood music in the consumer economy. As much as a rise in sales is welcome news, much of it is being driven by inflation. Indeed, when adjusted for inflation, our analysis shows volume sales to be down by 0.4%, which is modestly worse than last month.”

Chip West, a retail and consumer expert with Vericast, writes, “We are now entering, for much of the country, a time when it’s getting colder, so fuel and heating are going to be a big part of consumers’ budgets. Discretionary spending will take a hit from this.”

Results from two major recent culprits in the ongoing inflation narrative, food and fuel, back Saunders’ sentiment when we look at the October numbers. Gasoline stations rose to $64,094 billion, up from $61,567 billion in September and $63,948 billion in August.

Similarly, food shoppers plunked down $81,038 billion in October, up from the $79 billion range in both August and September. In response, Saunders notes, “All of this is inflation, but volumes held up better than in other segments simply because it is harder for consumers to cut back on food.”

Motor vehicle and parts dealers rose to $129, 461 billion from $127,764 billion in September, with a notable $118,812 billion spent by consumers on the autos and other motor vehicles segment within this category.

In other categories, consumers made their priorities known after spending roughly the same amount in October on clothing and accessories ($26 billion), sporting goods, hobbies, and instruments, ($9 billion) and building and garden supplies ($43 billion.) General merchandise stores, including department stores, slid to $69,979 billion from $70,107 billion in September, while miscellaneous store retailers rose slightly to $16,040 billion from $15,994 billion in September and non-store retailers rose to $111,505 billion from $110,224 billion in September. Spending on electronics stayed flat at roughly $7 billion.

“It is becoming more obvious that consumers are cutting back on the number of things they buy, especially as the focus switches to heavier winter garments which tend to be more expensive,” writes Saunders. “The hope will be that after a lull in October, consumers will splash out a little as the holidays approach and they look for outfits for events and occasions. Whether this materializes remains to be seen.”

Finally, we still continued to find ways to take advantage of what I like to call the “treat yo self” category. Health and personal care stores saw a slight uptick to $34,063 billion from $33,906 billion in September and food and drink places rose to $89,521 billion from $88.074 billion in September.

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As we head for the remaining holidays and Black Friday, solid questions about what consumers are willing to do to offset inflation and create holiday magic linger. We can expect some telling hints and updates in the coming days, but one sneak peek courtesy of West spells it out some.

“Due to constrained budgets, consumers will likely stretch out their holiday spending. They will be looking for deep discounts and additional savings during traditionally heavily promoted time periods like Black Friday and Cyber Monday, writes West. “Savvy retailers know that this holiday shopping season will be elongated, and any positivity seen in October to kick it off bodes well for the remaining months of 2023.”

The next round of monthly sales numbers is expected on December 15.

Author’s Note: Unless otherwise indicated, dollar amounts in this article are adjusted for seasonal variation and for holiday and trading day differences, but not for price changes.