In a surprising turn of events, US retail sales experienced a notable uptick in November, signaling a robust start to the holiday shopping season. The Commerce Department reported a 0.3% increase in the value of retail purchases, defying earlier forecasts. This unexpected surge was attributed to lower gasoline prices, allowing consumers to unleash their spending power.
The positive momentum extended beyond overall retail sales, with a 0.6% rise when excluding gasoline. Concurrently, another report revealed a significant drop in US unemployment benefit applications to 202,000 — the lowest level since October, indicative of a resilient labor market.
Despite concerns surrounding inflation and elevated borrowing costs, consumers demonstrated resilience. The buoyant job market, coupled with declining gas prices, empowered Americans to engage in robust spending during November’s holiday shopping spree.
Economist Alex Pelle from Mizuho Securities USA expressed optimism, stating, «November is clearly a strong month for US economic performance after a soft October.»
Within the retail sector, notable increases were observed in eight out of 13 categories. Leading the surge were restaurants and bars, along with sporting goods stores and online retailers. However, department-store sales saw a decline, reflecting subdued Black Friday shopping.
The ‘control group sales,’ a key metric for calculating gross domestic product (GDP), experienced a 0.4% advance. This measure excludes food services, auto dealers, building materials stores, and gasoline stations.
While the unexpected strength in November’s retail sales is encouraging, experts suggest that consumers, still mindful of higher prices and interest rates, are opting for online bargains. The Federal Reserve’s decision to maintain interest rates and revise growth estimates indicates confidence in the economy, with anticipated rate cuts to bolster employment and spending.
The true impact of November’s spending surge will become clearer with upcoming reports on real spending for goods and services later this month. This unexpected strength in consumer enthusiasm during the holiday season amid economic uncertainties underscores the resilience of the US retail sector.
