November’s retail sales are expected to continue the decline seen in October, primarily due to the impact of gasoline prices. The Census Bureau is set to release the figures on Thursday.
Economists anticipate a 0.2% drop in total retail sales for November, following a 0.1% decrease in October, based on estimates tracked by FactSet.
This report will provide the first look at the state of the economy since the Federal Reserve's decision to keep interest rates unchanged this week.
Similar to October, lower prices at the pump will have a negative effect on the overall figure. Marc Giannoni, chief U.S. economist at Barclay’s, highlighted this factor in a client note. However, if auto and fuel prices are excluded, retail sales are expected to rise by 0.2%, according to FactSet.
Despite facing challenges such as higher interest rates, persistent inflation, and the resumption of student loan payments, American consumers have managed to maintain their spending habits. However, recent retail earnings reports have indicated a slowdown in spending and sales growth. Therefore, November’s retail sales report will provide valuable insight into what can be expected for the remainder of the year.
Holiday Shopping Season off to a Solid Start, Reveal Data
Third-party data points indicate that consumers have had a promising beginning to the holiday shopping season, according to BofA economist Aditya Bhave. Bank of America credit- and debit-card data reveals that consumer spending per household increased by 0.5% year over year in November.
The National Retail Federation's monthly sales tracker highlights a 0.77% rise in total retail sales (excluding cars and gasoline sales) compared to October. The most significant sales growth came from popular gifting categories such as sporting goods, clothing and accessories, and general merchandise.
Matthew Shay, the federation's president, explains that as November accounts for half of the holiday season, these figures suggest a positive outlook for the entire holiday period.
Notably, both Black Friday and Cyber Monday this year achieved unprecedented online sales records. While a successful Black Friday weekend does not automatically guarantee a strong overall holiday season, Barclays equity analyst Adrienne Yih advises caution. However, the weekend's sales surpassed expectations, supporting the bank's belief that consumers are effectively "fending off the Grinch."
