As the holiday season approaches, Americans are showing they are still willing to spend money and grow the economy.

The Commerce Department released its latest consumer spending report Friday, showing gains in sales of automobiles, electronics, and restaurants and bars.

This is good news for the economy. The increases were slightly lower than from August to September, but the numbers show that Americans aren’t afraid to spend on basics like groceries or discretionary items they want.

Consumer spending rose 0.4% from September to October – a strong sign of a growing economy that has seen inflation fall from 9.1% to 2.6% in just over two years. This is close to its pre-pandemic levels.

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“I think we’ve seen a major gap between consumer confidence and their spending,” said Mark Mathew, executive director of research at the National Retail Federation.

Mathew points out that despite historically low confidence in the economy and prices, Americans continue to spend. The largest increases were in automobile sales at 1.6%, electronics and appliances at 2.3% and restaurants and bars at 0.7%. Mathews sees rising wages as the main factor behind the gains.

“You know, consumers spend what’s in their wallet, not what’s on their mind,” Mathew said. “We’ve had real wage growth. So wages have outpaced inflation and that’s positive.”

The data comes on the heels of Donald Trump’s election victory, in which he promised to lower prices even further, and ahead of a critically important holiday season for small businesses that rely on such spending to achieve revenue. annuals.

Mathews also notes that these expenses come at a time when Americans are saving less. Figures from the Bureau of Economic Analysis show the personal savings rate was 4.6% in September, a steady monthly decline from its peak of 5.2% in June.