Shoppers boosted spending in November, sending U.S. retail sales up 0.6% from October and marking a strong start to the holiday season, the Commerce Department reported Wednesday. The increase followed a revised 0.1% decline in October and a 0.1% gain in September.
It’s important to note that the report was delayed due to the 43-day government shutdown.
Key sector highlights:
Core retail sales, which exclude volatile sectors such as gas, cars, and restaurants, rose 0.4%, indicating continued discretionary spending despite broader economic concerns. Analysts note that shoppers are focusing on gifts while scaling back spending on home improvement, furnishings, and select electronics.
The National Retail Federation projects that November and December holiday sales grew by 3.7%-4.2% in 2024, potentially exceeding $1 trillion. For comparison, holiday sales in 2024 rose 4.3% to $976.1 billion. Retailers, including Lululemon Athletica and Abercrombie & Fitch, reported strong holiday results, while more comprehensive data from Walmart, Macy’s, and other major chains are expected next month.
Inflation pressures seem to be easing slightly. In December, consumer prices rose by 0.3%, the same increase seen in November. Meanwhile, core prices, which exclude the more volatile categories of food and energy, increased by 0.2%. Prices for manufactured goods remained unchanged, suggesting that the effects of tariffs may be diminishing.
Despite facing economic challenges, the retail sector has shown resilience. Early data from holiday shopping suggest that consumers are still willing to spend, although lower-income households may continue to experience financial difficulties. Additionally, weak hiring could impact consumer spending and overall economic growth in 2026.
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