Retail sales across the country jumped significantly in November. That’s the great news, according to a new report released by the US Commerce Department. The department announced that consumer spending — as measured by retail sales — jumped 0.6% this month. This represents a notable swing from October’s downwardly revised 0.1% decrease. This increase is especially important given that consumer spending represents nearly two-thirds of the US economy. Retail sales are a key component in powering that spending engine.
The November figures are a testament to a strong consumer sentiment entering into the holiday season. It’s worth noting that the control group, which excludes volatile components such as food and fuel, actually did even better than anticipated. It just increased by 0.4%! The jump was especially impressive given that economists had anticipated a 0.1% drop, representing much higher consumer demand than expected.
Over the three-month span from September to November, prices to consumers rose just 0.2%. At least in nominal terms, retail sales were down by 0.3% adjusted for inflation in this time period. This increase came in slightly below economists’ estimates, who had forecast a 0.4% increase, according to data from FactSet. Most importantly, this upbeat news signals a strong, resilient consumer, ready to open their wallets even as prices go up.
Not all sectors experienced growth. Retail spending was down in only two categories in November: furniture stores and department stores. Sales at furniture stores were down just 0.1% from October, and department stores experienced an even steeper 2.9% decrease. These sharp declines further highlight the unevenness of rapidly changing consumer spending behavior between retail categories.
Nearly every category saw dramatic increases in sales, particularly as the holiday shopping season neared. Specialty retailers fueled an astounding 1.9% boost in sales. This ongoing increase showcases consumers’ desire for more personalized and niche products at this time of year. Even gas stations and home improvement stores saw significant sales jump, up 1.4% and 1.3% respectively.
The positive retail sales data suggests that consumers are engaging with the market more actively than previously thought, which could bode well for economic growth heading into the new year. Despite a sputtering economy and rising inflation, analysts are looking for strong consumer spending as holiday time generally boosts spending to the highest monthly levels.