U.S. retail sales fell more than expected in November, likely a pullback after surging the previous month.
The US Commerce Department said on Thursday (15th) that retail sales fell 0.6% last month. Unrevised data for October showed sales rising 1.3 percent. Economists had forecast sales falling 0.1%.
Retail sales are mostly merchandise and are not adjusted for inflation. Last month’s drop in sales meant holiday shopping was pushed back into October. A shortage of motor vehicles is also holding back sales at auto dealerships.
A one-time tax rebate in California 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 clear unwanted inventory to appeal to cash-strapped consumers.
High inflation and rising interest rates are compressing household budgets, but consumer spending remains resilient thanks to a strong labor market. Consumers have also been dipping into their savings to buy goods. The savings rate was 2.3 percent in October, the lowest since July 2005.
Core retail sales, which exclude autos, gasoline, building materials and food services, slipped 0.2% last month. October’s data was revised down to 0.5% growth from 0.7%.