Nov. retail sales see modest gains as spending for holidays persists
Retail sales rose for the fourth straight month in November, as consumers in the United States continued to spend even as they faced fast rising prices and an upswing in coronavirus infections.
The 0.3 percent increase in sales last month reported by the Commerce Department was a slowdown from the month before — something analysts said likely reflected a shift in the start of the holiday shopping season to October. Sales growth in October was revised slightly higher Wednesday to 1.8 percent.
Consumers, motivated by news of product shortages and fast rising prices, began their holiday shopping well before the Thanksgiving holiday, which is seen as the traditional start of the holiday shopping season.
“We saw consumers thinking of inflation and supply chains being choked, so the ultimate pantry loading happened in October,” Kathy Gramling, a consumer industry markets consultant for EY.
As overall sales rose, spending — the key driver of U.S. economic activity — at grocery stores and liquor stores, gas stations, clothing retailers and home improvement stores increased. Sales declined in several categories however: Spending at electronics and appliances stores fell 4.6 percent last month, while sales at car dealers and general merchandise stores, such as department stores, were down as well. Health and personal care stores, such as pharmacies, also saw a decrease of 0.6 percent.
Gramling said retailers were likely to face logistical issues in January, when consumers come back to stores with returns from the holiday season.
The latest measure of sales — the key driver of economic activity in the United States — comes as consumers are grappling with high inflation and a predicted surge in coronavirus infections. The sales data for November does not reflect how shoppers might have reacted to the emergence of the omicron variant, which started to make headlines during the Thanksgiving weekend.
But for now, economists expect sales will continue to rise in December.
A reading on consumer sentiment, measured by a University of Michigan survey on how Americans view the general state of the economy, increased in December after falling to its lowest level in a decade in early November. Those surveyed pointed to inflation as the most serious problem the country faces, according to preliminary results published Friday.
Also on Friday, the Labor Department reported consumer prices had risen at their fastest pace in nearly 40 years. The consumer price index was up 6.8 percent last month compared with a year earlier as demand for products remained strong and the virus continued to disrupt manufacturing and transportation.
U.S. consumers were not slowed by surging coronavirus cases in November, when more than 30 states saw sustained increases in infections and hospitalizations climbed in areas of the country.