Retail sales experienced a 0.3% increase in November, reflecting the resilience of American consumer spending as the unofficial holiday season commenced.
According to the Commerce Department’s report on Thursday, sales rebounded from a revised 0.2% decline in October, defying economists’ expectations of another downturn. Excluding car and gas sales, there was a 0.6% increase.
Restaurants saw a notable 1.6% growth in business, while furniture stores experienced a 0.9% rise. Online sales increased by 1%, but electronic and appliance sales dipped by 1.1%. Department store sales saw a significant decline of 2.5%. These figures are not adjusted for inflation.
Despite concerns about a potential slowdown due to rising credit card debt and delinquencies, as well as falling savings, Americans seem inclined to continue spending. Consumer spending surged in the third quarter, although economists anticipated a slowdown in the final months of the year.
Recent employment data showed an addition of 199,000 jobs in November, with a decline in the unemployment rate to 3.7%. Inflation, a notable concern, dropped from 9.1% to 3.2% in just over a year, easing worries of a recession.
However, the University of Michigan’s Index of Consumer Sentiment reveals persisting pessimism, although preliminary December figures suggest improved moods as more people perceive a cooling inflation.
This pullback in spending has consequences for companies heavily reliant on holiday sales. Hasbro Inc., the creator of popular toys like Monopoly and Play-Doh, announced a 20% reduction in its workforce, affecting around 1,100 jobs.
Despite challenges faced by retailers like Walmart and Macy’s, which reported more selective shopping behavior, the National Retail Federation remains optimistic about the 2023 winter holidays. The group forecasts a 3% to 4% rise in holiday sales from November to December, slightly slower than the 5.4% growth last year but consistent with the pre-pandemic average increase.
While retailers anticipate a boost from the remaining busiest shopping days, including December 26, tracking by Sensormatic Solutions, which monitors store traffic, reveals that these top 10 days typically contribute to around 40% of holiday retail traffic.
It’s important to note that the government’s monthly retail sales report provides only a partial view of consumer spending, excluding many services like healthcare, travel, and hotel lodging.
Featured Image: Megapixl @ Arturszczybylo
