Retail sales September 2022:

Customers shop at the GU Co. store in the SoHo area of ​​New York, US, on Friday, 7 October 2022.

Gabby Jones | Bloomberg | Getty Images

Consumer spending was flat in September as prices rose sharply and the Federal Reserve implemented higher interest rates to slow the economy, according to government figures released Thursday.

Retail and food service sales were little changed for the month after rising 0.4% in August, according to the advance estimate from the Commerce Department. That was below the Dow Jones estimate for a 0.3% increase. Excluding cars, sales rose by 0.1[ads1]%, against an estimate for no change.

Considering that the retail sales figures are not adjusted for inflation, the report shows that real spending across the sectors covered by the report has retreated for the month.

A report from the Bureau of Labor Statistics on Thursday indicated that consumer prices rose 0.4% including all goods and services, and 0.6% when excluding food and energy.

Miscellaneous retail retailers saw a 2.5% decline for the month, while gas stations were down 1.4% as energy prices fell.

A number of other sectors were also down, including sporting goods, hobby, book and music stores and furniture and home decor stores, both of which were down -0.7%, while electronics and appliances were down 0.8% and motor vehicles and parts dealers fell 0.4%.

Sales of general merchandise stores rose 0.7%. Winners also included online stores, bars and restaurants, clothing retailers and health and personal care stores, all of which saw 0.5% increases.

While gains for the month were muted, retail sales rose 8.2% from a year ago, matching the rise in the consumer price index. Shoppers generally remain flush with cash, although there are indications of late that they are dipping into savings to make ends meet.

The Fed has adopted several rate hikes with the aim of reducing inflation and bringing the economy back into balance. The markets expect the central bank to raise interest rates by up to 1.5 percentage points more through the end of the year.

A separate report on Thursday showed that import prices fell 1.2% in September, slightly more than the estimate of 1.1%. Exports decreased by 0.8 per cent.

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