Americans spent 0.8% more at stores and restaurants in September, but prices rose 0.6% in the same month, so most of that extra spending bought the same things at higher prices. Here is how to tell nominal growth from real growth, and why it matters for your paycheck and savings.
Key takeaways
- US retail sales rose 0.8% in September, but the figure is not adjusted for inflation, and consumer prices rose 0.6% that month.
- “Nominal” numbers are measured in today’s dollars; “real” numbers remove the effect of rising prices to show what money actually buys.
- The same idea applies at home: a raise or a savings rate only makes you better off if it beats inflation.
The news in brief
On October 15, the Commerce Department’s Census Bureau reported that retail and food services sales reached an estimated $745.0 billion in September, up 0.8% from August and 6.3% from September 2025. Economists had expected a gain of about 0.3%, according to FactSet figures cited by the Associated Press. August was also revised up, to a 1.3% increase.
The headline looks strong, but the details tell a more modest story. Sales at gas stations jumped 6.4% in a single month because each gallon cost more: AAA put the national average for regular at $4.33, compared with under $3 before the latest Middle East conflict pushed oil prices up. Excluding gas stations, sales rose just 0.2%.
A day earlier, the Bureau of Labor Statistics reported that the Consumer Price Index (CPI) rose 0.6% in September, the largest monthly gain in five months, and 3.7% over the past year, up from 3.4% in August. Gasoline prices alone rose 9.1% in the month. As the Census Bureau notes, its retail figures are “not adjusted for price changes.” In other words, they are nominal. (For more on why fuel costs move so much, see what’s really in the price of a gallon of gas.)
The basic idea, explained
Every amount of money can be described in two ways. The nominal value is the number on the receipt or the pay slip: dollars as they are today. The real value adjusts that number for changes in prices, so you can compare what it actually buys across time.
Think of a shopping cart. Last year you filled one cart for $150. This year you fill exactly the same cart, with the same items, and the checkout says $155.55. Your spending went up by $5.55, or 3.7%. But you did not bring home a single extra apple. Your nominal spending grew; your real spending stayed flat. That is the difference.
Economists use a price index, most often the CPI, to convert nominal figures into real ones. A simple rule of thumb: real growth ≈ nominal growth − inflation. For more precise math, divide instead of subtracting: (1 + nominal growth) ÷ (1 + inflation) − 1. For small numbers, the two methods give nearly the same answer.
Applied to September’s report: sales rose 0.8% while prices rose 0.6%, so the rough real gain is about 0.2%. That is a rough estimate, because the CPI also covers rent, healthcare and other services that retail sales don’t include. Still, it explains why economists described the numbers as resilient but not booming. One economist quoted by the AP put it this way: consumers are still spending, but part of the gain reflects higher prices.
A worked example
Let’s use September’s 3.7% annual inflation rate to test three everyday numbers. These are illustrations, not forecasts.
| Item | Nominal change | Real change (after 3.7% inflation) |
|---|---|---|
| US retail sales, Sept. 2026 vs. Sept. 2025 | +6.3% | About +2.5% |
| Salary of $50,000 with a 3% raise | +$1,500 (to $51,500) | About −0.7% |
| $10,000 savings at 4.5% APY for one year | +$450 (to $10,450) | About +0.8% |
Retail sales: 1.063 ÷ 1.037 = 1.025, so real sales are roughly 2.5% higher than a year ago, well below the 6.3% headline.
The raise: $51,500 ÷ 1.037 = about $49,662 in last year’s dollars. Even though the pay slip is $1,500 bigger, it buys about 0.7% less than last year’s $50,000 did. A 3% raise during 3.7% inflation is a small real pay cut.
The savings account: $10,000 × 1.045 = $10,450. Adjusted for prices, $10,450 ÷ 1.037 = about $10,077. The real gain is around $77, or 0.8%, not $450. And if the account paid 1%, the real return would be negative: the balance would grow while its buying power shrank. (Why the inflation outlook matters for savers is covered in why inflation expectations matter for your savings.)
What you can do
- Read headlines with one question: “Is this adjusted for inflation?” Sales, wages, home prices and GDP are often reported in nominal terms first.
- Check your own real raise. Compare your percentage pay increase with the latest annual CPI figure. If it is lower, your buying power fell, which is useful context for budgeting or a pay conversation.
- Compare your savings rate with inflation. The interest rate on your savings account minus inflation gives a rough real return. Shopping around among insured savings options is one way to narrow the gap.
- Track quantities, not just dollars, in your budget. If your grocery bill rose, check whether you are buying more or simply paying more. That tells you where you have room to adjust.
This is general information, not financial advice.
Key terms
- Nominal value: an amount measured in current dollars, with no adjustment for price changes.
- Real value: an amount adjusted for inflation, showing what money can actually buy compared with another period.
- Retail sales: a monthly government estimate of what consumers spend at stores, gas stations, online retailers and restaurants.
Sources
- U.S. Census Bureau, Advance Monthly Sales for Retail and Food Services, September 2026 (October 15, 2026)
- Associated Press, Retail sales up a better-than-expected 0.8% in September as shoppers remain resilient (October 15, 2026)
- U.S. Bureau of Labor Statistics, Consumer Price Index, September 2026 (released October 14, 2026), as summarized by CPI Inflation Calculator
Written by The Daily Economy editorial team with AI assistance and checked against the sources above. Read our editorial policy.