September retail sales outperform as foot traffic remains elevated

Consumer spending was sturdy last month. Unfazed by the end of federal unemployment benefits and other dissipating stimulus money, core retail sales increased 0.7 percent in September and 13.5 percent from the same period last year, according to Marcus & Millichap. Although inflation, which climbed 0.4 percent last month, was a contributing factor to the rise, the overall spending picture remained brighter than anticipated. Lingering back-to-school shopping and wider office openings contributed to the gains, as spending for apparel and at gas stations advanced 1.1 percent and 1.8 percent, respectively. Only two of the 13 major retail sectors recorded declines last month: electronics and appliance stores, and health stores.

Strong sales support retail properties. Consumer spending supported brick-and-mortar retailers through the worst of the health crisis. Overall vacancy peaked in the first quarter of this year and has since trended lower while rents continue to rise. Whi