Consumer Spending Recovery: October 2025 Retail Monitor Shows Strong Momentum

This analysis is based on the CNBC report [1] published on November 10, 2025, which revealed that consumer spending bounced back in October according to the CNBC/NRF Retail Monitor data. The report indicates a significant recovery from September’s 0.66% month-over-month decline, with total retail sales (excluding auto dealers and gas stations) increasing by 0.6% month-over-month and 5.0% year-over-year [2].

The October rebound coincided with positive market momentum, as the S&P 500 gained 0.69%, NASDAQ rose 0.74%, and Dow Jones increased 0.58% on November 10, 2025 [0]. However, by November 12, 2025, consumer sectors showed modest underperformance, with Consumer Cyclical down 0.20% and Consumer Defensive down 0.08%, suggesting the market may be looking beyond the October data to potential headwinds [0].

: The October data reveals significant variation across retail segments. Digital products experienced exceptional growth at 22.39% year-over-year, followed by clothing and accessories (+7.89% YoY) and sporting goods (+7.19% YoY) [2]. Conversely, furniture and home furnishings declined 1.7% year-over-year, while building and garden supply fell 8.52% year-over-year [2], indicating potential housing market spillover effects.

: NRF President and CEO Matthew Shay attributed the spending recovery to “wage growth outpacing inflation, historically low unemployment, and wealth effects from strong stock market valuations” [2]. This suggests the consumer spending rebound is built on sustainable economic fundamentals rather than temporary factors.

: The October momentum provides a positive foundation for the NRF’s 2025 holiday sales forecast of 3.7% to 4.2% growth over 2024, totaling between $1.01 trillion and $1.02 trillion [2]. However, the divergence between strong discretionary spending and weak home-related categories suggests shifting consumer priorities that could impact holiday season performance.

:

• Holiday Season Expectations
  : The strong October bounce-back sets high expectations for holiday performance. Any disappointment could trigger significant market reactions, particularly given current retail stock valuations [0].
• Inflation Persistence
  : While wage growth is outpacing inflation currently, continued elevated inflation could erode real purchasing power despite nominal wage gains [2].
• Consumer Debt Levels
  : The analysis lacks specific data on credit usage, but rising consumer debt could constrain future spending if economic conditions deteriorate.
• Housing Market Spillover
  : The pronounced weakness in home-related categories (-8.52% in building supplies) could spread to broader consumer confidence if housing market conditions deteriorate further [2].

:

• Digital Commerce Strength
  : The exceptional 22.39% year-over-year growth in digital products [2] suggests continued opportunity in e-commerce and technology-enabled retail.
• Discretionary Spending Resilience
  : Strong performance in clothing, sporting goods, and general merchandise indicates sustained consumer confidence in discretionary purchases.
• Economic Momentum
  : Solid labor market conditions and wage growth provide a foundation for continued consumer spending strength [2].

The October 2025 retail data demonstrates consumer spending resilience with broad-based recovery across most categories. Total retail sales increased 0.6% month-over-month and 5.0% year-over-year, representing a significant rebound from September’s decline [2]. The spending recovery is supported by strong economic fundamentals including wage growth outpacing inflation and historically low unemployment [2].

Major retailers showed mixed performance as of November 12, 2025, with Walmart (WMT) at $103.18 (-0.25%), Target (TGT) at $91.52 (-0.07%), and Amazon (AMZN) at $246.00 (-1.24%) [0]. The modest underperformance in consumer sectors suggests investors may be weighing the positive October data against potential headwinds including inflation persistence, interest rate environment, and consumer debt levels.

Critical monitoring indicators include monthly retail sales data, consumer confidence indices, inflation and wage growth differentials, and credit card delinquency rates. The October momentum provides a positive foundation for the holiday season, but the sustainability of spending levels will depend on continued economic strength and consumer financial health.