modest rise in retail sales of 0.3% in November, optimism still high | Economic news
By ANNE D’INNOCENZIO, The Associated Press
NEW YORK (AP) – Americans slowed spending from October to November, but continued to shop ahead of the critical holiday season, pushing back prices and shortages.
Retail sales rose a modest 0.3% seasonally adjusted in November from the previous month when sales jumped 1.8%, the US Department of Commerce said on Wednesday.
It was a bit weaker than most economists had expected, but the first holiday purchases may have pushed holiday purchases traditionally made in November, up one month to October, with news shortages and supply chain issues regularly in the headlines.
And there were also signs of a return to pre-pandemic behavior, with Americans spending more on services such as going out to dinner, activities that had come under significant pressure due to fear of infection.
While sales fell at department stores and other outlets, restaurant sales were up 1% from October. This is the biggest gain since July, although the spread of the new omicron variant may slow down these activities.
Omicron emerged at the end of November, and Wednesday’s report would not capture any of its negative effects.
Online sales were unchanged last month as that figure was up 4.1%.
Stephen Stanley, chief economist at Amherst Pierpont, said the typical pattern of monthly retail activity before the pandemic alternated between weak and strong, and it could also be a return to more normal activity.
“The shortfall against expectations, while substantial, is not big enough to be a game-changer for the economy as a whole,” Stanley wrote on Wednesday. “It looks like we can (be) back to this fashion. I still expect the Christmas retail season to be robust.”
And retail sales, while not as strong as expected, continue to rise amid an economic environment that has crippled some retailers. Many have had to dramatically increase wages to find and keep workers, increasing the cost of their operations. They are also scrambling to fill the shelves with the main US ports still being safeguarded.
At the same time, as Americans pay more for basic necessities like food and gas, slowing spending can be an indication of inflation fatigue.
At Stew Leonard’s, a family-owned grocery chain based in Connecticut and New York, some families buy chicken instead of red meat or bananas rather than the more expensive blueberries. Others seem unfazed, catching lobster despite a significant rise in prices.
The United States reported last week that consumer prices had jumped 6.8% in the past year, the biggest increase in nearly four decades. Some of the biggest cost increases are in things that consumers would be very aware of. Along with food and gas, the prices of houses, cars, clothes, and just about everything are on the rise.
But American families, on average, are making more money than before the pandemic. Wages and salaries rose 4.2% in September from a year earlier, the largest annual increase in two record decades. And the government provided a stimulus check of $ 1,400 to all households in March as well as an unemployment assistance supplement of $ 300 per week from March to September. Most households with children began receiving the $ 300 monthly child tax credit in July.
This has led to continued optimism about consumer spending, which is the source of the majority of economic activity in the United States.
Although big box retailers promise full shelves for the holidays, supply constraints appear to be stubborn. Target CEO Brian Cornell recently told The Associated Press he believes it will take several years to remove blockages in the supply chain.
It’s not all bad news. The Minneapolis-based retailer has added 30,000 new supply chain jobs to meet growing demand and to navigate the changed landscape.
“It’s really driven by incredibly strong demand and a very healthy American consumer,” said Cornell.
The National Retail Federation, the nation’s largest retail group, said this month that the holiday shopping season appears to be on the verge of beating its forecast of 8.5% to 10% sales growth. , 5% despite additional challenges this year, from a new variant of the coronavirus, to soaring inflation.
The retail report released on Wednesday only covers about a third of overall consumer spending and does not include services such as haircuts, hotel stays and airline tickets.
Still, the average American consumer spent and an additional $ 330 per person in November compared to the same time last year, according to Neil Saunders, chief executive of GlobalData.
“Such a large increase is a clear signal that, regardless of economic or pandemic concerns, the consumer is determined to spend what it takes to have a happy holiday season,” Saunders wrote.
AP Economics writer Chris Rugaber in Washington contributed to the report.
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