Here’s the Real Story Behind November’s US Retail Sales Gain
November’s sales data reflects American consumers’ willingness to spend amid a retail backdrop that incentivizes purchases by deals and discounts.
U.S. retail sales for last month rose 0.7 percent to $724.6 billion, representing a 3.8 percent gain from year-ago levels. Retail trade sales for November rose 0.9 percent, and were up 4.1 percent from last year’s figures. Retail sales for the month were helped by a strong 2.6 percent jump in auto sales. Excluding autos, retail sales rose just 0.2 percent.
Fashion sales slipped in November as apparel and accessories retailers saw sales slip 0.2 percent to $26.32 billion, and sales at department store retailers were down 0.6 percent to $10.82 billion. Sales at nonstore retailers, the category that includes e-commerce sites, saw sales rise 1.8 percent to $127.1 billion.
“In the early days of the holiday shopping season, U.S. consumers drove a nearly 4 percent increase in November retail sales relative to 2023, albeit with continued mixed results across discretionary categories,” David Silverman, Fitch Ratings’ senior director said.
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And while overall retail sales reflect shoppers’ resilience to headwinds such as inflation and rising interest rates, Silverman said consumers have been spending selectively, which has been reflected through softer results in categories that include consumer electronics and apparel.
“November is increasingly a difficult month to analyze on its own, as retailers introduce holiday promotions earlier and earlier, but these reported figures suggest a generally reasonable start to the season,” Silverman said. He noted that many retailers spoke about taking a cautious approach to the holidays in their third quarter earnings’ conference calls, which could indicate manageable inventory levels and disciplined expense management. “Post the holidays, all eyes will be turned toward the new presidential administration and the impact of topics like tariffs, immigration and taxation on consumer confidence and spending,” he concluded.
“With the elections behind us and following a strong October, consumers maintained optimism, driving impressive retail spending in November,” said Chip West, RRD’s retail and consumer behavior expert, who added that lower fuel prices likely freed up greater purchasing power. “Retailers’ widespread promotions further incentivized purchases, as price-conscious consumers capitalized on deals and discounts.”
West said the positive overall data appears to bode well for December as consumers seek out last minute deals to get those final gifts for holiday.
The National Retail Federation (NRF), a retail trade organization, has forecasted that holiday sales this year will grow 2.5 percent to 3.5 percent over last year’s levels.
“Job and wage gains, modest inflation and a heathy balance sheet have led to solid holiday spending,” Jack Kleinhenz, NRF’s chief economist, said. “The season’s pace of spending is clearly on track to reach our forecast.”
Wells Fargo economists Tim Quinlan and Shannon Seery Grein said in a research note that the data suggests that holiday sales are tracking in its forecast range of just over 3 percent. The economists are expecting 2024 to be a “decent” holiday sales season for retailers.
The two cautioned that despite the easing of inflationary pressures, still-high prices have eroded household purchasing income and new challenges in the form of tariffs could impact price pressures in 2025, resulting in slower consumption as the year progresses.
