US Retail Sales Disappoint With 0.3% Growth In November Despite High Expectations For The Holidays

The latest report on retail sales was a disappointment after coming up short of expectations that the holiday shopping season may provide a boost.

The U.S Census Bureau on Wednesday released its report on core retail sales that showed a miniscule 0.3% rise in November. This compares with the expectations that it would be closer to at least 1%. The figure is lower than the revised 1.7% gain for October.

The endurance of COVID-19’s aftershocks has been an anchor weighing down profits in consumer-driven sectors. Supply chain bottlenecks have reduced inventory available for retailers and contributed to a rise in inflation that has reached levels not seen in decades.

A strong holiday shopping season was expected to bring in $843.4 billion to $859 billion in sales, according to the National Retailers Federation (NRF), with both figures higher than in 2020. However, there was concern that inflation or fears of COVID-19 could eat into any final tally.

The poor retail sales report follows the release of the Labor Department’s latest Producer Price Index (PPI) that showed the price of wholesale goods jumped 9.6%. This leap was driven by higher prices for energy and food. The data reflects the pressure inflation is putting on the price of many products.

There is also evidence that the picture is not entirely dire. According to the Census Bureau report, retail sales overall rose by 18.2% compared to last November when the COVID-19 pandemic depressed sales across the board.

Unemployment has remained low and the weekly number of initial unemployment claims are good indicators of Americans’ capacity to spend more this year. Despite the arrival of the Omicron variant of COVID-19 and the continued spread of the Delta strain, neither appears to have dramatically deterred Americans from shopping.