Americans dialed back their spending in November, new data from the Census Bureau showed Wednesday.
US retail sales grew by 0.3% in November, a sharp decline from the previous month and less than economists had predicted.
Even so, sales were 16.1% higher than in the same period last year.
Americans have been struggling with rising prices and supply shortages this year. The emergence of the fast-spreading Omicron coronavirus variant has also rattled markets and industries, such as travel. But economists and retail sector experts still believe that the holiday shopping season will be strong. Many consumers have built up excess savings during the pandemic and have been bolstered by rounds of federal stimulus and rising wages.
November’s retail data is “not necessarily a reliable guide to the path of spending across the remainder of the holiday season,” Ian Shepherdson chief economist at Pantheon Macroeconomics, said in a note to clients. “It’s a marathon, not a sprint.”
Retail sales in November and December will grow between 8.5% and 10.5% this year compared with the 2020 holiday season, to a record of up to $859 billion, projects the National Retail Federation, an industry trade group.
Stores have signaled to customers to shop for goods early in the holiday season to ensure they can buy the gifts they want. Many consumers shopped earlier than ever for the holidays: Sales in October jumped 1.8%. This may have caused a dropoff in November, some economists say.
The muted retail sales figure in November also did not reflect an impact caused by new virus cases, Andrew Hunter, a senior US economist at Capital Economics, said in a note to clients Wednesday.
However, “Black Friday sales were weak and appears to highlight the ongoing drag” from shortages of goods, Hunter said.
Inflation has climbed to a 39-year high according to one indicator, and higher prices are forcing some consumers to adjust their shopping behavior.
At grocery stores, some shoppers are responding by trimming the number of products they’re buying and trading down to less-expensive private-label brands. Others are switching to cheaper stores.
