Cars and Clothes Spur Rise in Retail Sales: Live Updates

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Credit…Andrew Spear for The New York Times

Eight million Americans have slipped into poverty since May and there are 11 million fewer jobs than before the pandemic. And yet, for the fifth straight month, people continued to pull out their wallets and spend more on cars, sporting goods and clothing.

Consumer spending rose 1.9 percent in September, the Commerce Department said on Friday, more than twice the rate of increase that most economists had predicted. Retail sales have fully recovered to pre-pandemic levels and “jump started,” according to one economist, a “nascent economic recovery.”

“We thought we would see negative impacts on spending by now, but these are surprisingly strong sales gains,” said Scott Anders, an economist at Bank of the West. “We thought catastrophic joblessness would weigh more on confidence, but it has risen.”

These seemingly contradictory trends — recovering consumer spending on the one hand and worsening poverty on the other — partly reflect the inequalities in the American economy that have existed for years, but have been amplified by the pandemic.

While millions of Americans have lost their jobs and are struggling to pay their rent and utilities bills, millions of others continue to work remotely, enjoying rising stock market investments, strong home values and low interest rates that are making big purchases like a new car easier.

“It is a two-tiered world,” Beth Ann Bovino, chief U.S. economist at S&P Global said.

The spending power of lower-income Americans had been boosted by the trillions of dollars of stimulus that the

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