US retail sales rose slightly in September, adding to months of big
gains
[November 26, 2025] By
CHRISTOPHER RUGABER
WASHINGTON (AP) — Sales at U.S. retailers and restaurants increased
modestly in September as resilient consumers moderated their spending
after splurging over the summer.
Sales rose 0.2% in September from the previous month, the Commerce
Department said Tuesday, in a report delayed more than a month because
of the government shutdown. Sales jumped 0.6% in July and August and 1%
in June. Numerous reports on inflation, employment, spending, and growth
remain delayed and the government won’t likely be caught up until late
December.
The retail sales figures, which aren't adjusted for inflation, suggest
that Americans pulled back on spending in September as many households
struggled with high prices for groceries, rent, and many imported goods
hit by tariffs. The retail sales report covers about one-third of
consumer spending, with the rest going to services such as travel,
haircuts, and entertainment. Still, higher spending should lift the
economy’s growth to a solid 3% annual rate in the July-September
quarter, economists forecast, after a sluggish 1.6% expansion in the
first half of the year.
Much of the spending, however, was driven by rising prices at gas
stations and grocery stores. Still, sales rose 0.7% in September at
restaurants and bars, a healthy gain in discretionary spending. Sales at
clothing, electronics, and sporting goods stores fell.
Consumer spending could slow in the final three months of the year,
economists warned. The government shutdown, weak hiring, and elevated
inflation will likely cause more Americans to cut back.
“The moribund labor market and ongoing drag on real incomes from
tariff-induced price increases suggest that this slowdown is likely to
be maintained,” Oliver Allen, an economist at Panthenon Macroeconomics,
a consulting firm, said.
Also on Tuesday, payroll processor ADP released its weekly measure of
hiring, which found that companies cut an average of 13,500 jobs a week
in the four weeks ending Nov. 8. The report is a sign hiring may have
slowed since September, when the government said a solid 119,000 jobs
were added.
The disparity found in economic data shows how the economy remains in an
uncertain state despite the solid growth in the third quarter. Hiring
has generally been weak and the unemployment rate has ticked higher,
which could drag down consumer spending and the broader economy if it
worsens. Unemployment rose to 4.4% in September, the highest in nearly
four years, from 4.3%, according to the delayed monthly jobs report
released last week.
Higher-income Americans are driving much of the gains, according to data
from Bank of America and reports from retailers such as Walmart, as
lower-income shoppers seek bargains and are more likely to spend more on
necessities.
Still, some retailers issued positive reports Tuesday, including
electronics chair Best Buy and Dick's Sporting Goods. Best Buy lifted
its sales and profit forecasts for the year.
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People shop among early Black Friday sale items at Best Buy
Thursday, Nov. 20, 2025, in San Diego. (AP Photo/Gregory Bull)
 Tuesday’s report comes before the
crucial winter holiday season kicks off this weekend, when retailers
earn as much as a fifth of their revenues. The National Retail
Federation and other forecasters expect modest sales gains this
year, compared with last year’s holiday, with the NRF projecting
that sales will top $1 trillion for the first time.
Separate figures from the Labor Department suggest that inflation
remains elevated but isn't accelerating, which could make it more
likely that a closely-divided Federal Reserve cuts rates next month.
Wholesale prices rose 0.3% in September from August, the Labor
Department said Tuesday, and 2.7% compared with a year ago. The
monthly gain in the producer price index was pushed higher by a
sharp increase in gasoline costs. The yearly figure was unchanged
from the previous month.
Core prices, which exclude the volatile food and energy prices, rose
just 0.1% in September and 2.6% from a year earlier. Those figures
are less than expected and suggest inflation pressures are cooling,
economists said.
The retail sales figures land as many economic data are coming in
mixed. Wage growth has slowed this year and is just modestly above
inflation, a trend that is likely driving Americans’ concerns around
affordability.
Wages, on average, rose 3.8% in September from a year ago, the
government said last week. That is only modestly above September’s
annual inflation rate of 3%.
But for many Americans, particularly those earning lower incomes or
for older workers, wages are rising more slowly and are clearly
trailing inflation.
The Bank of America Institute estimates that for the poorest
one-third of households, pay grew just 1% in October from a year
earlier, while the highest one-third saw their wages rise 3.7%. The
gap between higher- and lower-income households matches an August
figure as the widest in nearly a decade, the bank said. Bank of
America uses anonymous data from its customers to calculate the
figures.
And a separate report from JPMorganChase Institute showed that
incomes for a typical household have retreated to levels last seen
in the early 2010s, after the harsh 2008-2009 recession.
“Households are going into the end of the year with weak income
growth and bank balances that remain flat, after adjusting for
inflation,” the report said.
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AP Retail Writer Anne D’Innocenzio contributed to this report.
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