November Retail Sales Rebound, Jump 4.1% From 1 Year Ago

U.S. retail sales made a stronger-than-expected rebound in November, showing a 0.3% increase on a monthly basis. This turnaround came after a contraction of 0.2% in October that had followed six consecutive months of growth.

The retail sales data, released by the U.S. Census Bureau on Thursday, is frequently seen as an indicator of consumer demand and is closely monitored to assess consumption trends.

November Retail Sales: Key Highlights

• U.S. retail sales showed a 0.3% monthly rise in November, surpassing the downwardly revised 0.2% contraction in October, and exceeding the expected 0.1% decrease.
• On an annual basis, total retail sales showed a 4.1% increase, up from the 2.2% recorded in October. It marks the highest year-over-year advance since February 2023.
• Retail sales, excluding the automotive sector, saw a 0.2% increase, a slight improvement from the flat reading seen in the previous month and better than the predicted 0.1% drop.
• When excluding gasoline stations as well, retail sales also rose by 0.6%, from the 0.1% seen in October.

This retail sales data, published on Thursday follows the Federal Reserve meeting that kept interest rates unchanged at the range of 5.25% to 5.5%. Policymakers suggested the possibility of upcoming rate cuts in 2024. The latest Fed dot plot indicated a median preference for interest rates to fall to 4.6% in 2024, followed by 3.6% in 2025 and 2.9% in 2026.

Markets are pricing in 160 basis points of rate cuts by the Fed for the next year, which is equivalent to six fully priced rate cuts, as per the latest CME Group FedWatch tool.

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