US retail sales miss expectations in November

[WASHINGTON] US retail sales increased less than expected in November, likely payback after surging in the prior month as Americans started their holiday shopping early to avoid shortages and paying more for goods.

Retail sales rose 0.3 per cent last month, the Commerce Department said on Wednesday. Data for October was revised higher to show retail sales surging 1.8 per cent instead of 1.7 per cent as previously reported. Sales have now risen for four straight months.

Economists polled by Reuters had forecast retail sales rising 0.8 per cent. Estimates ranged from as low as being unchanged to as high as a 1.5 per cent increase.

Several of the top US retailers reported in mid-November that they had noted an earlier start to holiday shopping.

Trillions of dollars in Covid-19 pandemic relief from governments across the globe fuelled demand for goods, straining supply chains. The resulting shortages, ranging from motor vehicles to furniture and electronics, have raised goods prices.

Consumer prices increased a solid 0.8 per cent in November, with the year-on-year gain of 6.8 per cent the largest since June 1982.

The modest retail sales gain likely does not change views that the economy is regaining steam after a slowdown in the third quarter that was triggered by the Delta variant of the coronavirus and rampant shortages.

The report was released as Federal Reserve officials prepared to wrap up a two-day policy meeting.

The US central bank is expected to announce that it would speed up the tapering of its massive monthly bond purchases, against the backdrop of soaring inflation. An early interest rate increase next year is on the table.

Excluding automobiles, gasoline, building materials and food services, retail sales dipped 0.1 per cent after accelerating 1.8 per cent in October. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.

Consumer spending, which accounts for more than two-thirds of US economic activity rose at a 1.7 per cent annualised rate in the third quarter. More than half-way through the fourth quarter, consumer spending is above its third-quarter pace.

Economic growth estimates are as high as an 8.7 per cent rate. The economy grew at a 2.1 per cent pace in the third quarter.

REUTERS