US retail sales fell more-than-expected in November, likely a decline after surging the previous month.
The US Department of Commerce said on Thursday (15) that retail sales fell 0.6% last month. Unrevised data for October showed a 1.3% increase in sales. Economists had expected sales to fall 0.1%.
Retail sales are mostly goods and are not adjusted for inflation. Last month’s drop in sales meant that holiday shopping has been postponed until October. The shortage of motor vehicles is also holding back sales at car dealerships.
A one-time California tax rebate provided a boost, some families received stimulus checks of up to $1,050 in October, and Amazon’s second Prime Day ended last month. Other factors weighing on sales include a shift in spending towards services and discounts by retailers to weed out unwanted inventory to appeal to cash-strapped consumers.
High inflation and rising interest rates are squeezing household balance sheets, but consumer spending remains resilient thanks to a strong labor market. Consumers have also drawn on their savings to buy goods. The savings rate was 2.3% in October, the lowest since July 2005.
Core retail sales, which exclude autos, gasoline, building materials and food services, fell 0.2% last month. October data was revised downwards to 0.5% growth from 0.7%.
