(Bloomberg) -- US retail sales increased at a firm pace in November, bolstered by a surge in car purchases and solid online shopping that masked more mixed spending elsewhere.
The value of retail purchases, not adjusted for inflation, increased 0.7% after upward revisions to the prior two months, Census Bureau data showed Tuesday. Excluding autos, sales climbed a more modest 0.2% for a second month.
Seven of the report’s 13 categories posted increases. Auto sales in November, as tracked by Ward’s Automotive Group, were the strongest in over three years as interest rates came down and dealerships deployed deep year-end discounts. Analysts also attributed the boost to increased demand for replacement vehicles in the wake of Hurricanes Milton and Helene.
E-commerce sales jumped 1.8%, as Black Friday and Cyber Monday promotions generated massive sales on platforms like Amazon.com Inc. and TikTok Shop. Receipts at building material stores rose 0.4%. Spending at restaurants and bars, the only service-sector category in the retail report, fell for the first time since March. Grocery store sales also declined.
The S&P 500 and Treasury yields were both lower as of 10:15 a.m. in New York.
The data suggest consumers remained resilient during the crucial holiday shopping season, lured by discounts and bolstered by incomes that have been rising faster than prices. Measures of confidence have also been climbing since the November election, and some consumers have reported they could avoid higher prices from possible new tariffs imposed by the Trump administration by purchasing big-ticket items now.
What Bloomberg Economics Says...
“It’s important to note that sentiment differs by political affiliation, with Democrats more concerned that proposed tariffs will drive a resurgence in inflation. As such, Democrats and independents have cited tariffs as a key driver of ‘buy-in-advance’ behavior, while Republicans broadly expect inflation to slow dramatically ahead.”
— Eliza Winger, economist
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The retail sales report comes at the start of the Federal Reserve’s two-day policy meeting, which is expected to culminate in another interest-rate cut on Wednesday. Policymakers point to a general easing in inflation and a somewhat-softer labor market as reasons to lower borrowing costs, though several have called for a more gradual approach to rate reductions going forward given the underlying strength of the economy.
So-called control-group sales — which feed into the government’s calculation of goods spending for gross domestic product — increased 0.4% in November following a drop in October. The measure excludes food services, auto dealers, building material stores and gasoline stations.
Over the past three months, control-group sales increased an annualized 5.6%, boding well for fourth-quarter GDP.
The retail sales figures aren’t adjusted for inflation and largely reflect purchases of goods, which comprise a relatively narrow share of overall consumer outlays. Personal consumption expenditures data due Friday will provide more details on inflation-adjusted spending on goods and services in November.
Separate data Tuesday showed US industrial production unexpectedly declined for a third month in November on decreases in utility output and mining, while manufacturing output rose less than forecast. A National Association of Homebuilders index, meanwhile, showed a jump in the six-month outlook gauge, on optimism that the incoming Trump administration would remove regulatory hurdles to new construction.
--With assistance from Chris Middleton and Maria Clara Cobo.
(Updates with analysts on auto sales, NAHB index.)
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