Consumer spending remained surprisingly resilient in September, the Commerce Department said, as retail sales increased by 0.4% seasonally adjusted, with goods and services excluding autos increasing by 0.5%, considerably better than the 0.1% that was forecast, and putting sales back in the plus column from an August advance of 0.1%, revised. Note that these figures are seasonally adjusted, but not for inflation, which increased 0.2% in September according to the Consumer Price Index.

Related economic news has included initial unemployment claims at 241,000 in a seasonally adjusted total, falling 19,000 from the previous week, yet still below the expected 260,000. The move came despite the impacts of hurricanes Helene and Milton, which recently struck the Southeast, causing tremendous economic disruption. Claims both in Florida and North Carolina declined following a spike the prior week.

These reports for the stock market futures and the ones that have lifted Treasury yields were positive. At the same time, these reports attest to consumer spending’s continued strength-two thirds of U.S. economic activity-as well as a still-resilient labor market despite earlier signs of weakness this summer.

On the retail side, miscellaneous store retailers rose 4%, clothing stores 1.5%, and bars and restaurants 1%. These advances were balanced by a decline of 1.6% for gas stations due to low fuel prices as well as declines in electronics and appliances stores (3.3%) and furniture and home furnishings (-1.4%).

This news dovetails with the decision last week by the Federal Reserve to reduce its benchmark borrowing rate by half a percentage point, although signs are likely for more reductions going forward. However, policymakers are optimistic that inflation will return to the Fed’s 2% target, while still concerned about a weakening labor market, which hasn’t improved despite strong payroll growth in September and steady weekly claims since the hurricanes affected the pool, though those effects have since faded. Continuing claims, though, were up to 1.867 million, a continuation of problems in some areas still, including Michigan, which was also affected by a recent Boeing strike.