October U.S. Retail Sales: Consumer Slowdown, Holiday Trends & Spending Shifts
What does flat retail sales growth in October reveal about consumer behavior heading into the holiday season?
This report takes a closer look at October retail performance, where headline sales remained flat and September results were revised lower, reflecting a moderation in spending as consumers navigated inflation, economic uncertainty, and a softening labor market.
From a sharp rebound in department store sales ahead of the holidays to continued weakness in building materials and dining, the data highlights increasingly selective consumer spending patterns across retail categories.
While core retail sales excluding auto and gas remained positive, the real story lies in how much of the recent growth appears to be driven by higher prices rather than stronger purchasing volumes, particularly as middle-income consumers continue shifting toward value-oriented retailers.
But here’s the catch —With holiday momentum showing signs of slowing after Thanksgiving and unemployment beginning to rise, an important question emerges:
Can consumer spending remain resilient into 2026, or will economic pressure begin to weigh more heavily on retail demand and discretionary purchases?