In brief
American retail sales rose in August thanks almost entirely to affluent consumers who are spending on travel, restaurants and entertainment despite high inflation. Credit card companies report higher revenue from wealthy cardholders and the biggest gains come in airline and restaurant categories. Discount retailers also see strong sales as lower‑income shoppers turn to bargains, highlighting the income split in consumer habits.
On November 4, 2026 Xinhua reported that U.S. retail sales jumped in August, but the growth was largely due to affluent Americans continuing to spend on travel, restaurants and entertainment even as inflation surged. Lower‑income households scaled back, according to credit card and retail data.
Clay Ramsay, a researcher at the Center for International and Security Studies at the University of Maryland, told Xinhua that the top earners—about one‑fifth of the population—are the main drivers of consumer spending.
"It's a fact that overall consumer spending is being fueled by the one‑fifth or so who are best off,"
Ramsay said.
"At the same time, lower earners are also spending more in dollar terms by buying the same things at higher prices,"
Ramsay added.
Credit card data backs the split. American Express reported a third‑quarter revenue of $20.1 billion, up 9 percent from a year earlier, and card spending rose 8 percent to $454 billion. Travel and entertainment purchases grew 10 percent, airline spending climbed 13 percent and restaurant sales jumped 9 percent. U.S. business magazine Forbes noted that American Express’s customer base is relatively affluent and that credit card use is higher among wealthy shoppers for discretionary activities, while lower earners turned to plastic for day‑to‑day spending.
Air travel also benefited: American Airlines earned $16.3 billion in the third quarter, up 19.3 percent from the same period a year earlier, showing sustained demand for flights and dining on the go.
Lower‑income shoppers pile into discount stores
Dollar General and Dollar Tree both beat quarterly sales expectations in August. The chains went up on the wave of bargain hunters looking for daily necessities as wage growth stalled. The trend shows lower‑income consumers are cutting spending on higher‑priced goods and turning to discounted options, experts said.
Overall, the rise in retail sales illustrates a growing divide: the affluent can afford travel and entertainment, keeping store traffic high, while lower‑income shoppers seek bargains and cut back. As inflation stays elevated, the split in spending habits is likely to deepen, affecting the broader economy for months to come.