November’s retail sales are poised to extend October’s decline when the Census Bureau releases the figures on Thursday. Blame gasoline prices—not consumers—for the slowdown.
Economists are expecting total retail sales to drop by 0.2% in November, according to estimates tracked by
FactSet,
following a 0.1% drop in October.
The report represents the first snapshot of the economy since the Fed opted not to raise rates this week.
As in October, lower prices at the pump will drag down the headline figure, noted Marc Giannoni, chief U.S. economist at Barclay’s, in a note to clients. Stripping away auto and fuel prices, retail sales are expected to tick up 0.2%, according to FactSet.
While that’s a lower pace of growth than in previous months, “these are solid outcomes,” Giannoni wrote, especially because Americans are facing several challenges that are weighing on their pocketbooks, including higher interest rates, nagging inflation, and the resumption of student loan payments.
So far, consumers have largely been able to buck those concerns and keep spending. But in the latest spate of retail earnings, many companies warned that spending—and subsequently, sales growth—was slowing. November’s retail sales report will provide a preview into what to expect for the final stretch of the year.
Third-party data suggest that consumers got “a solid start to the holiday shopping season,” wrote
BofA
economist Aditya Bhave in a note to clients. Bank of America credit- and debit-card data, for instance, shows that consumer spending per household rose by 0.5% year over year in November.
The National Retail Federation’s monthly sales tracker showed that total retail sales, excluding cars and gasoline sales, were up 0.77% compared with October. The strongest sales growth came from top gifting categories, including sporting foods, clothing and accessories, and general merchandise.
“Since November makes up half the holiday season, these numbers are a positive indication of what we can expect for the full holiday season,” said Matthew Shay, the federation’s president.
Indeed, online sales on both Black Friday and Cyber Monday reached new records this year. And while a strong Black Friday weekend doesn’t necessarily result in a strong holiday season overall, cautions
Barclays
equity analyst Adrienne Yih, the weekend’s sales were better than expected, bolstering the bank’s expectation that consumers are effectively “fending off the Grinch.”
Write to Sabrina Escobar at [email protected]
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