After reporting a sharp increase in U.S. retail sales in the previous month, the Commerce Department released a report on Wednesday showing retail sales rose by much less than expected in the month of November.
The Commerce Department said retail sales edged up by 0.3 percent in November after soaring by an upwardly revised 1.8 percent in October.
Economists had expected retail sales to increase by 0.8 percent compared to the 1.7 percent spike originally reported for the previous month.
“U.S. consumers spent at a moderate clip in November as persistent supply shortages and elevated prices tempered consumers’ willingness and ability to spend on goods,” said Gregory Daco, Chief U.S. Economist at Oxford Economics.
The uptick in retail sales reflected notable sales growth by gas stations, food and beverage stores and sporting goods, hobby, musical instrument, and book stores.
However, substantial decreases in sales by department stores and electronics and appliance stores limited the upside.
The report also showed sales by motor vehicle and parts dealers edged down by 0.1 percent in November after spiking by 1.7 percent in October.
Excluding sales by motor vehicle and parts dealers, retail sales still rose by 0.3 percent in November after surging by 1.8 percent in October. Ex-auto sales were expected to jump by 1.0 percent.
Closely watched core retail sales, which exclude automobiles, gasoline, building materials and food services, slipped by 0.1 percent in November after soaring by 1.8 percent in October.
“Looking ahead, strong labor income growth, elevated excess savings and healthy balance sheets should support robust consumer spending momentum in the year ahead,” Daco said.
“Still, downside risks to the outlook are rising given the renewed deterioration in the health situation,” he added. “Even absent a significant drag on growth from the Omicron variant, the expected rotation in the consumer spending mix away from goods will mean cooler retail sales in 2022.”
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