US Consumers Keep Spending Despite Inflation, But Resilience Has Limits

US consumers continued spending in September despite accelerating inflation driven by higher gas prices, which rose 20% month-over-month and pushed wholesale costs up 6.3% annually, the largest increase in nearly four years. Retail sales grew 0.8%, though much of that reflected higher prices, with gas station spending surging 6.4%. The producer price index showed food costs jumped 1.2% from August, the biggest monthly gain since February, as diesel prices averaged $6.32 a gallon, up from $3.66 a year ago. Unemployment claims stayed below 200,000 last week, a historically low figure, supporting consumer resilience despite gloomy sentiment and inflation-adjusted paychecks declining year-over-year for the first time since May. The Federal Reserve is expected to raise its key interest rate again this year to combat inflation, which would increase borrowing costs for mortgages, car loans, and credit cards. September hiring slowed to 29,000 jobs, well below the expected 90,000, though the unemployment rate remains low at 4.2%.