A pivotal economic release is set to land this Thursday at 8:30 a.m. ET: the retail sales report for September.

This data will provide a fresh snapshot of household spending during the final month of the third quarter, offering vital clues as to whether American consumers continued to prop up the broader economic growth.

Retail sales are projected to rise by 0.3% month-over-month (m/m) in September, as per TradingEconomics consensus, marking a modest improvement from the 0.1% uptick seen in August.

Some Wall Street analysts are forecasting even stronger results. Bank of America is predicting a more robust performance, with headline retail sales potentially climbing by 0.8% for the month.

“We forecast above-consensus gains of 0.7% and 0.8% in the Census Bureau’s September estimates for retail sales excluding autos and the core control group,” said Aditya Bhave, economist at Bank of America.

“This week’s retail sales report should continue the run of hot data,” Bhave added. “A report like the one we are forecasting would be significant, since it would come on the back of very encouraging GDP and GDI revisions and a gangbusters September jobs report.”

Bank of America anticipates significant gains in spending categories like department stores, up 2.4% m/m, general merchandise, up 2.2% m/m and clothing, up 1.5%.

A robust retail sales report for September would add to the narrative that the U.S. economy is in no immediate danger of a slowdown.

The idea of a “no landing” scenario, in which the economy neither contracts sharply (a hard landing) nor cools down significantly (a soft landing), is gaining traction.

The latest data points, including the blowout 336,000 jobs added in September and stronger-than-expected GDP figures, suggest that the economy may be re-accelerating rather than slowing down.

“If retail sales accelerate considerably, in our view, the narrative may shift further toward ‘no landing’ or even re-acceleration,” Bhave added.

“‘No landing’ is bullish for stocks, in our view, as long as inflation doesn’t flare up,” Ohsung Kwon, CFA, equity analyst at Bank of America, said.

The S&P 500 Index, tracked by the SPDR S&P 500 ETF Trust SPY, rose 0.4% during Wednesday afternoon trading in New York, sitting just 0.4 percentage points below its record high set on Monday.

Bank of America indicated that Hurricane Helene had a short-term impact on spending in parts of the southeastern U.S., including Florida, Georgia, North Carolina and South Carolina.

Card spending growth dipped in those states during the storm’s immediate aftermath, although the effect was temporary.

In the lead-up to the hurricane, there was also a notable surge in grocery spending in these areas as households prepared for the storm.

Despite the potential for strong retail sales growth, analysts at Bank of America suggest it is unlikely to alter the Fed’s current trajectory, at least in the near term.

“With policy rates still close to 5%, we think the Fed will feel comfortable cutting a few more times — two to four, perhaps — even if labor and economic activity data remain strong, as long as disinflation continues,” Bhave said.

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