Retail Monitor Shows 12th Straight Sales Gain as Confidence Sinks

A streak that holds, with a catch

American shoppers kept spending in September even as their own view of the economy got worse. That gap is now the main story in consumer data. The CNBC/NRF Retail Monitor, released October 8 by the National Retail Federation, found that retail sales rose for the 12th month in a row. Higher gas prices squeezed household budgets the whole time.1 Total retail sales, which exclude auto dealers and gas stations, came to $560.8 billion. That was up 0.28% from August and 4.05% from a year earlier.3 Core retail sales, which also leave out restaurants, reached $453.1 billion, up 0.27% for the month and 3.73% for the year. Both rates were faster than August's core gains of 0.17% and 3.47%.1

The trade press reported the numbers almost the same way, and most outlets used NRF's framing of a steady, budget-conscious consumer.246 NRF CEO Matthew Shay said households are focusing on everyday essentials while gasoline takes a bigger share of their spending. He also said retailers are using promotions and value pricing to keep products affordable.3 That is accurate as far as it goes. Set the report next to the price, sentiment and credit data, though, and the 12-month streak looks less like strength and more like consumers keeping up spending in dollar terms because prices are higher.

The inflation problem inside the nominal numbers

The Retail Monitor is not adjusted for inflation. One regional outlet pointed out that consumer prices were up 3.4% in August and are expected to stay high because of fuel costs, which it linked to the ongoing U.S. war with Iran.8 The August Consumer Price Index showed gasoline up 3.9% in a single month, enough to account for more than a third of the overall increase. Energy prices were up 16.3% from a year earlier.26

This is our own rough calculation, not an official figure. If total sales rose about 4% while prices rose 3.4%, the real increase in what people bought was well under one percentage point. The same contrast is clearer in groceries. Grocery and beverage sales were $89.4 billion in September, up just 1.9% from a year earlier.8 Month over month they rose only 0.09%.6 Food-at-home prices were 2.2% higher in August than a year before.21 If grocery spending is growing more slowly than grocery prices, shoppers are probably putting less in their carts, trading down, or both. That fits Shay's description of households focused on essentials. It is a harder message than the phrase "sales growth" suggests.

Grocery inflation by itself is moderate. The USDA's September outlook expects food-at-home prices to rise 2.4% in 2026, a bit below the 20-year average of 2.6%. Restaurant prices are expected to rise 3.5%.21 The average hides big differences between foods. Beef and veal are forecast to rise 9.4% this year.21 Analysts at farmdoc daily note that egg prices were down 23% from a year earlier while seafood was up 6.5%.24 An earlier breakdown estimated that a large drop in egg prices would offset more than half of beef's contribution to grocery inflation.27 Shoppers buying beef are seeing much faster inflation than the headline average.

Restaurants complicate the picture. Food services and drinking places were the biggest category in the report, with $107.8 billion in sales, up 5.4% from a year earlier.8 Restaurant prices were rising about 3.4% a year.21 Our reading is that spending on eating out is still growing faster than menu prices, which is a sign of some resilience. That resilience may be concentrated in higher-income households.

Where the money went

The category breakdown shows selective spending, not a broad pullback. Electronics and appliances led the yearly gains at 8.41%. Furniture and home furnishings was the only category down from a year earlier, falling 2.7%.2 Non-store sales that could not be assigned to a specific retailer category totaled $99.1 billion, up 7.83% from a year earlier.8 Health and personal care rose 4.46%, and clothing rose 2.21%.6

The weak furniture number fits a housing market that is not producing many new households to furnish. Home Textiles Today said the category "missed the mark" in a month when every other major sector grew.5 The same outlet also reported, separately, that shoppers spent a little less during Amazon's Prime Big Deal Days and that inflation was a clear factor in how they shopped.5

A methodology reset worth flagging

NRF changed how it builds the report starting with the September data. Readers should be careful with comparisons. The Monitor now uses a panel of about 120 million debit and credit cards from Affinity Solutions. The panel is weighted to reflect U.S. consumers and scaled to match Census Bureau retail totals.5 Online sales by store-based retailers are now counted in their own categories, so each sector reflects total omnichannel spending.3 NRF says the monthly and yearly changes cannot be compared directly with Monitor figures published before September 2026.1

That matters for any year-over-year story. A year ago, the Monitor showed total sales falling 0.66% month over month in September 2025 but up 5.42% year over year. Those yearly figures were not seasonally adjusted.9 It is tempting to say spending growth has slowed from about 5.4% to about 4%. Under the new method, that comparison is not reliable. The more defensible conclusion is that growth is positive, modest and roughly keeping pace with inflation.

Confidence breaks lower

The sentiment data is much bleaker than the spending data. The Conference Board's Consumer Confidence Index fell 6.7 points to 81.9 in September, its lowest level since 2014.43 Forecasters had expected a reading around 89.44 The Expectations Index fell to 63.6. It has stayed below 80, a level historically linked to recession within a year, since February 2025.41 For the first time in the four years the question has been asked, more respondents described their personal finances as bad than as good.43

The causes overlap with what retailers are seeing. Conference Board chief economist Dana Peterson said consumer write-in comments about prices, especially oil and gas, reached record levels and reflected September's jump in fuel costs.44 Average 12-month inflation expectations rose to 6.1%. The survey period also included a federal funds rate hike, and the share of consumers expecting higher interest rates jumped to 68.4%.41 The University of Michigan's survey showed the same direction, with sentiment at its second-lowest reading on record.43

Not every source reads this the same way. Axios noted that a separate report released the same day showed the job market still in solid shape.45 One macro tracker contrasted the confidence collapse with S&P Global PMI data showing business activity speeding up, and called it a widening gap between how consumers and businesses see the economy.46 One analysis of the Conference Board breakdowns found that the drop was steepest for lower-income and middle-aged households.47 Taken together, the data fit an economy that looks fine on average while a growing share of households is struggling.

Credit: elevated, but not collapsing

Credit data is where the most alarming headlines overstate the case. The New York Fed's second-quarter report put total household debt at $18.8 trillion, with 4.7% of it in some stage of delinquency, a slight improvement. Credit card balances rose to $1.26 trillion.11 One widely shared figure says 12.8% of card balances are more than 90 days past due, up from 7.6% in 2022.13 New York Fed researchers say that measure is pushed up by old, charged-off debts that lenders now keep reporting for longer, not by more people actually falling behind.15

The better measure of current stress is the share of balances newly becoming seriously delinquent. For credit cards it was 6.97% in the second quarter of 2026, compared with 6.93% a year earlier.11 Researchers describe that pace as elevated but mostly stable since 2024.18 Student loans are the clear exception. The share of student debt 90 or more days past due rose to 10.6%.16 Our conclusion is that credit stress is real but contained for now. It does not yet explain the confidence collapse. Fuel prices and inflation expectations do.

The subscription squeeze

Recurring subscription costs are another pressure that the retail figures do not capture. Netflix raised U.S. prices in March. Apple TV and Peacock raised theirs in August, the fourth increase for each in four years.31 Disney then raised the ad-free standalone Disney+ and Hulu plans to $21.49 a month.32 One tracker found that a seven-service bundle went from $99.93 to $112.43 a month over ten months, an increase of about 12.5%.38 Deloitte's research puts average household streaming spending at $69 a month. In the same survey, 41% of Americans said their services are not worth the price.31

These charges are small one at a time, but they recur every month while gas and food already take more of the budget. That helps explain why households feel worse off even as their total spending goes up. With fuel prices high and a rate hike now feeding into expectations, the 12-month streak is fragile heading into the holidays, even though retailers are presenting it as a sign of strength.