%1

Retail sales jumped 1.7 percent in October, according to data released Tuesday by the Census Bureau, beating expectations and rising for the third straight month, The Hill reported. U.S. retailers, restaurants and bars made $638.2 billion in sales last month without adjusting for inflation, up from $627.5 billion in September. Analysts expected a 1.4 percent increase from September, which saw sales grow 0.8 percent from August, according to revised figures released yesterday. The surprisingly strong month of retail sales is a promising sign for the U.S. economy amid high inflation and plummeting consumer confidence. While the labor market, wage growth, stock market and consumer spending have all held steady this fall, a 30-year high in consumer price growth has strained household budgets and turned public opinion against President Biden’s handling of the economy. Even so, the persistence of strong retail sales growth shows a willingness among consumers to power through what economists expect to be a temporary surge in inflation.

Federal Reserve officials said yesterday that they are vigilant of the ways that higher inflation can affect U.S. households and dampen consumer sentiment and want to get it under control, Reuters reported. While wages are rising for some workers, consumer sentiment is down to a "level that you might associate with a recession," said Richmond Fed President Thomas Barkin, citing the consumer sentiment survey from the University of Michigan. "I think that's very much because of the impact that prices have on people," including those who spend a significant part of their pay on food and gas, Barkin said during a virtual panel organized by the Fed. Atlanta Fed President Raphael Bostic said the central bank aims for low inflation because it doesn't want households to stress about rising prices. "That's one of the reasons why, you know, I think you've heard from all of us concerns about the higher levels of inflation that we've seen recently and the need to get that back under control," Bostic said. The Fed this month began to reduce the pace of its monthly asset purchases, the first step in scaling back the support offered to the U.S. economy during the pandemic. Fed officials would like to wind down the bond purchases before they raise interest rates. Some policymakers say that the Fed should be prepared to act in case inflation lasts longer than expected. St. Louis Fed President James Bullard, speaking earlier in the day, said the Fed should "tack in a more hawkish direction" over its next couple of meetings to be prepared in case inflation does not ease.

Banks largely eased credit standards for businesses, commercial real estate investors and households in the third quarter of the year, as the U.S. economy weathered the latest wave of the coronavirus pandemic, a Federal Reserve survey reported on Monday, Reuters reported. The Fed's Senior Loan Officer Survey, offering evidence of continued momentum for the economy, said banks "generally reported having eased standards" for business loans by lowering rates, expanding credit lines or imposing less restrictive terms. The banks "cited a more favorable or less uncertain economic outlook" as well as more competition among lenders and "an increased tolerance for risk" amid general improvement in markets and the economic outlook, the Fed reported. Demand for loans was also up, particularly among middle-sized and larger firms. Looser standards and higher demand also were reported for commercial real estate lending. Banks in general also eased standards for consumer credit card and auto loans by lowering credit score requirements or increasing credit limits.