Blitz Bureau
WASHINGTON: Shoppers were in a mood to spend money in November as retail sales rose by 0.7 per cent, surpassing expectations on strong sales of cars and robust online spending, the Census Bureau said, reports usnews.com.
The strong showing augurs well for the holiday shopping season, a critical period for most retailers. The performance in November follows an upwardly revised October increase of 0.5 per cent. Economists had predicted a gain of 0.5 pc. Annual gains in online sales were strong, rising by 7.9 pc as consumers took advantage of a variety of incentives around the Thanksgiving holiday. Eating and drinking establishments saw a 4.9 per cent increase from year ago levels.
“With the economy humming along and this year’s election outcome swiftly decided, leading to a more certain and clear path forward (regardless of political leanings), consumers had the confidence to spend (whether through cash or debt),” said Piyush Patel, Chief Strategic Business Development Officer at Algolia, an artificial intelligence search firm. The spending should continue into 2025 but at a slower pace than this year, says Michele Raneri, VicePresident and Head of Research at TransUnion. She is forecasting a 2.9 per cent increase in after-inflation consumer spending next year, down from this year’s 5.2 per cent pace.
“It will be more stable, a sign that things are getting back to normal” after the outsized spending that followed the end of the Covid-19 pandemic, she says. The retail sales report came as the Federal Reserve began its twoday meeting to consider interest rate policy. Market analysts expected the central bank to lower rates by a quarter point but to signal in its updated economic and rate projections a slightly less accommodative approach next year. That would fit with recent strongerthan-expected economic data as well as uncertainty about what the incoming Trump administration will propose in terms of an economic agenda.
