October was a landmark month in terms of pandemic recovery.
Personal household spending rose 1.3% in October compared to September, according to data from the Commerce Department. Personal income increased 0.5%, as employers increase wages across industries to fill roles in a competitive labor market.
The growth in household spending comes amid a period of record inflation. Consumer prices rose by 6.2% in October compared to a year ago, according to the Bureau of Labor Statistics’ monthly report. This number represented the highest inflation rate since the 12-month period ending in November 1990.
Despite higher prices, people are set to break shopping records this year. A recent survey from ICSC showed that shoppers will likely spend an average of $491 throughout Thanksgiving weekend. According to an Adobe report, consumers have already spent $72.2 billion online so far this holiday season, marking a 19.8% growth from last year. Adobe predicts that online sales will hit $207 billion this year, which would mark the first time that the online retail holiday season crosses $200 billion.
“The increase in personal income in October primarily reflected bumps in compensation of employees and personal income receipts on assets that were partly offset by a decrease in government social benefits,” read the personal spending report from the commerce department.
To attract talent this holiday season, certain retailers have begun offering higher starting wages and benefits. Macy’s recently announced that it would boost its minimum pay to $15 per hour and launch a tuition benefit program for all U.S.-based salaried and hourly employees. At Kohl’s, hourly store, distribution center and e-commerce fulfillment center employees who work through the holidays will be eligible for a bonus of between $100 and $400.
Meanwhile, jobless claims fell to 199,000 last week, marking the lowest level of initial claims since November 15, 1969, the Labor Department said on Wednesday. Resignations appear to have begun tapering off as well. In September, the number of U.S. workers who quit their retail jobs was in 685,0000, down from August’s 721,000.