ARLINGTON, Va.—Total retail sales grew 0.3% in November after increasing 1.8% in October, and one economist believes the data could indicate inflationary pressures are easing.
"Retail sales growth moderated in November in nominal terms and fell well below the month's inflation print," stated NAFCU Chief Economist and Vice President of Research Curt Long. “The consumer price index advanced 0.8% on the month, and the Bureau of Economic Analysis estimated that total consumer spending was flat during the month in real terms.
There were mixed results among different sectors during November. Gas station sales grew by 1.7% followed by food and beverage stores (+1.3%) and sporting goods and hobby stores (+1.3%).
"According to the U.S. Energy Information Administration, retail gas prices peaked in the second week of November and have been falling since," added Long. "That helps explain the steep drop in gas station sales during the month."
Year-over-year growth in retail sales was up 17.9% during the month, up from +16% in October. Control group sales – which excludes auto, gas, and building material categories – were up 17.1% from a year ago, the data show.
A ‘Solid Gain’
“Restaurants enjoyed a solid 1% gain during the month, but that may not last as data from Open Table indicates that in-person dining has fallen recently with the arrival of the omicron variant,” said Long. “Department store sales plummeted 5.4% in November following a 2.5% rise in October. That could be the result of earlier-than-normal holiday shopping as consumers try to get out in front of supply chain-driven shortages.”
Of note, electronics and appliance store sales fell by 4.6%, as did general merchandise (-1.2%) and health and personal care (-0.6%).
“The impending expiration of child tax credits, combined with lower gas prices and omicron should lead to slower consumption in early 2022,” concluded Long. “The bright side of that is that it could ease inflationary pressures. Were that to happen, the Federal Reserve may have to rethink its latest hawkish turn.”