By Nathalie Voit
Sales at U.S. retail stores cooled in November, rising by a modest 0.3%. Sales growth slowed from October’s upwardly revised 1.8% increase, data from the Labor Department released Dec. 15 found.
However, consumer demand remains strong and significantly above last year’s levels. In the 12 months through November 2021, retail and food services sales soared 18.2%. Meanwhile, total sales from September through November 2021 were up 16.2% from the same period last year.
The strong year-on-year sales data will surpass the 6.8% surge in consumer prices recorded in November, according to the commerce department’s monthly retail report. Despite this, inflation is running at a four-decade high as robust consumer demand collides with pandemic-related supply-chain and labor constraints.
The dip in sales from October to November is also related to consumers shopping earlier in the holiday season. According to Labor Department data, October’s sales gain was the largest since March.
“Consumers have been bombarded with messages about the impact of supply shortages on the availability of holiday gifts,” said chief economist at Nationwide, David Berson. “They may well have done a lot of their holiday shopping earlier than usual.”
The census survey showed a 4.6% decline in electronics sales from October to November. Retail spending in general merchandise stores also fell by 1.2% from the previous month, according to the report. Spending at health and personal care stores similarly dipped, slowing by 0.6% in November.
In contrast, spending at gas stations increased by 1.7%, driven by rising gasoline prices. Food and beverage store spending also climbed 1.3% from October, lifted by higher costs stemming from inflation.
“Food and gas are forcing hard choices for consumers in other areas this holiday season,” said senior economist at Wells Fargo Tim Quinlan. “Consumers are no longer the price-takers they were when they were flush with cash from stimulus checks.”
