Retail sales experienced a notable increase of 0.6% in November, indicating resilience in consumer spending during a crucial shopping period. This increase follows an even more minor decrease of 0.1% in October. It just is a positive step toward countering some of the bad stuff we’ve seen in recent months. Retail sales were running hot too, up 0.6% in both July and August. In June they posted an even more impressive 1% gain.
Even with the noise in the recent data, it is a good sign that consumer confidence is still quite high. Sales at clothing & accessories stores skyrocketed 0.9% in November. This increase may reflect the greater desire to spend on apparel-related gifts considered in the upcoming holidays. Further, businesses with no physical storefront (like many online businesses) experienced a 0.4% increase in sales, underscoring the continued shift to e-commerce.
Sporting goods and hobby stores were the big winners this month! In September they announced a sparkling 1.9% increase in sales. This increase could be due to the increased desire for outdoor recreation and physical activity during the fall and winter months.
Though this meant overall retail sales were exhibiting extremely strong year-over-year growth, a more mixed picture was emerging from other key economic indicators. Consumer prices increased by 0.3% in December over the prior month, largely reflecting inflationary pressures in sectors such as energy and transportation. The so-called core prices, excluding the volatile food and energy categories, rose by 0.2 percent. Inflation was cooling, attributed in part to decreased prices of gas and used cars. This points to some of the underlying inflationary drivers potentially being more settled.
In another positive sign, manufactured goods prices were essentially unchanged from November to December, perhaps showing that the effect of those tariffs is beginning to wear off. These innovations promise to shape future pricing strategies, with important lessons for application to other sectors.
Sales in advance of this year’s holidays jumped 4.3% over 2023 to $976.1 billion. This growth is a sign of continued strong consumer confidence heading into the holiday shopping season. Analysts expect to gain further insights into holiday spending patterns when major retailers such as Walmart and Target report their results next month.
