US Retail Sales Surge in November as Holiday Shopping Picks Up
American consumers opened their wallets more than expected in November. Retail sales climbed 0.6% during the month, according to the Commerce Department. This strong performance followed a revised 0.1% drop in October. The data arrived over a month late because of the federal government shutdown.
Consumer Spending Shows Resilience Through the Year
Retail sales edged up just 0.1% in September. However, July and August both saw solid 0.6% gains. June recorded an even stronger 1% increase. These figures paint a picture of uneven but persistent consumer spending throughout much of the year.
Several retail sectors posted notable gains in November. Clothing and accessories stores enjoyed a 0.9% rise in sales. Online retailers reported a 0.4% increase. Sporting goods and hobby stores experienced a sharper jump of 1.9%. Restaurants, the only services category in the report, posted a 0.6% increase.
Industry Gathers Amid Concerns Over Prices and Tariffs
The retail data emerged as about 41,000 industry participants gathered for the National Retail Federation's annual convention. Discussions focused heavily on high prices, the impact of President Donald Trump's tariffs, and a weakening job market. These factors shape the outlook for consumer demand.
Industry executives noted early data points to a solid holiday shopping season overall. However, financial stress continues for lower-income households. Hiring has remained generally weak, raising concerns about consumer spending and broader economic momentum in 2026.
Inflation Pressures Show Signs of Easing
On the inflation front, price pressures appear to be moderating. Consumer prices rose 0.3% in December from November, matching the prior month's pace. Core inflation, which excludes food and energy, increased 0.2%, the same rate as in November.
If sustained, this pace would bring inflation closer to the Federal Reserve's 2% target. Many economists had expected a sharper rise as data collection normalized after last year's shutdown. The modest increase came as a relief. Manufactured goods prices were flat in December, suggesting the impact of tariffs may be waning.
Retail Federation Projects Strong Holiday Season
The National Retail Federation projects retail sales for November and December rose between 3.7% and 4.2% over 2024. This translates into total spending of $1.01 trillion to $1.02 trillion. The 2024 holiday season saw spending of $976.1 billion.
Major retailers like Lululemon Athletica and Abercrombie & Fitch indicate holiday sales met or exceeded expectations. A clearer picture will emerge next month when companies such as Walmart and Target report quarterly results.
Wholesale Prices Also Show Modest Increases
On the wholesale front, prices rose a modest 0.2% in November from October. Year-on-year, they were up 3%, according to the Labor Department's producer price index. This data also faced delays due to the shutdown.
Excluding volatile food and energy components, core wholesale prices were flat on a monthly basis. They rose 3% from a year earlier. Gasoline prices climbed sharply during the month, contributing to the headline increase.
The wholesale inflation data was originally scheduled for release on December 11. December's PPI is now set for publication on January 30.
The producer price data follows signs of easing consumer inflation. Consumer prices rose 0.3% month-on-month in December and 2.7% from a year earlier. This remains above the Federal Reserve's 2% target but lower than many had feared.
