Retail sales grew faster than Wall Street analysts expected in November, reflecting continued resilience among U.S. consumers and signaling a strong start to the U.S. holiday season. .
Retail sales rose 0.7% in November. Economists had expected spending to rise 0.6%, according to Bloomberg data. Meanwhile, retail sales for October were revised upward to 0.5% from a previously reported 0.4% increase in the same month, according to Census Bureau data. Profits were boosted by a 2.4% month-on-month increase in auto and auto parts sales and a 1.8% increase in online sales.
Excluding automobiles and gasoline, sales rose 0.2% in November, below the consensus estimate of a 0.4% rise. The control group in Tuesday’s release, which excludes some volatile categories and factors into the quarter’s gross domestic product numbers, rose 0.4%, in line with expectations.
Bradley Saunders, North America economist at Capital Economics, wrote in a note to clients on Tuesday that the report reflects “consumer resilience.”
“November’s solid increase in retail sales was driven by auto sales, but still shows signs of broad-based strength, with control group sales also increasing at a healthy pace,” Saunders said. added.
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Wells Fargo senior economist Tim Quinlan said in a note to clients that Tuesday’s data points to a “decent” holiday season for retailers. However, there are some warning signs that consumer spending could slow into 2025.
“The possibility of new tariffs being imposed at some point next year suggests new price pressures,” Quinlan wrote. “While we expect households to continue spending in the new year, the pace of consumption will slow and tariff-related price pressures will further intensify as the year progresses.Today, the overall household sector remains in a fair financial position. However, data suggests that consumers are in a worsening situation.” They are even more vulnerable amid slowing real income growth and still-high financing costs. ”
The report comes as investors continue to closely monitor the health of the U.S. economy and as the Federal Reserve scales back its restrictive interest rate policy. So far, economic data has generally been better than expected, a welcome sign for investors as markets move toward accepting that the Fed may not cut rates as quickly as initially expected.
Investors awaited an update on how the Federal Reserve feels about the trajectory of the U.S. economy on Wednesday, with the release of the central bank’s latest economic forecast summary and Federal Reserve Chairman Jerome Powell’s press conference. are.
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