Retail sales measure the total value of goods sold in retail stores, covering various products like clothes, electronics, and food. It’s reported monthly and provides insight into consumer spending. Higher retail sales suggest a strong economy as people are spending more money. While lower sales can signal economic slowdowns as people might be spending less.
This indicator is crucial for understanding the health of the economy since consumer spending makes up a large part of it. Economists and policymakers closely monitor retail sales to gauge economic performance and make informed decisions. Retailers also use this data to plan their strategies and meet consumer demand effectively.
November Retail Sales
Retail sales in the US went up by 0.7% in November compared to the previous month, which had a 0.4% increase in October. This was higher than the market’s expectation of a 0.5% increase.
Advance estimates for U.S. retail and food services sales in November 2024 reached $724.6 billion, marking a 0.7% increase from October and a 3.8% rise from November 2023. Total sales from September to November 2024 were up 2.9% compared to the same period last year. The monthly change for October 2024 was revised from 0.4% to 0.5%.
Retail trade sales increased by 0.9% from October 2024 and 4.1% from the previous year. Motor vehicle and parts dealers saw a 6.5% increase from last year, while nonstore retailers experienced a 9.8% rise from November 2023.
Source: Census.gov
Impacts on the market
The rise in retail sales in November was mainly due to Black Friday, when many shoppers took advantage of big discounts, leading to more sales.
This increase in spending is good for the economy, as it shows people are confident and spending more, which can boost company earnings and create more jobs.
Also, the Federal Reserve might consider these strong retail sales when deciding on interest rates. If the economy is growing too quickly, they might raise rates to prevent overheating and control inflation.
Higher retail sales can also boost investors’ confidence. However, it might also raise concerns about inflation, possibly leading to higher interest rates. The S&P 500 index fell due to worries about rising inflation.
