WASHINGTON (Reuters) – U.S. retail sales increased less than expected in November, likely payback after surging in the prior month as Americans started their holiday shopping early to avoid shortages and paying more for goods.
Retail sales rose 0.3% last month, the Commerce Department said on Wednesday. Data for October was revised higher to show retail sales surging 1.8% instead of 1.7% as previously reported. Sales have now risen for four straight months.
Economists polled by Reuters had forecast retail sales rising 0.8%. Estimates ranged from as low as being unchanged to as high as a 1.5% increase.
Several of the top U.S. retailers reported in mid-November that they had noted an earlier start to holiday shopping.
Trillions of dollars in COVID-19 pandemic relief from governments across the globe fueled demand for goods, straining supply chains. The resulting shortages, ranging from motor vehicles to furniture and electronics, have raised goods prices.
Consumer prices increased a solid 0.8% in November, with the year-on-year gain of 6.8% the largest since June 1982.
The modest retail sales gain likely does not change views that the economy is regaining steam after a slowdown in the third quarter that was triggered by the Delta variant of the coronavirus and rampant shortages.
The report was released as Federal Reserve officials prepared to wrap up a two-day policy meeting.
The U.S. central bank is expected to announce that it would speed up the tapering of its massive monthly bond purchases, against the backdrop of soaring inflation. An early interest rate increase next year is on the table.
Excluding automobiles, gasoline, building materials and food services, retail sales dipped 0.1% after accelerating 1.8% in October. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity rose at a 1.7% annualized rate in the third quarter. More than half-way through the fourth quarter, consumer spending is above its third-quarter pace.
Economic growth estimates are as high as an 8.7% rate. The economy grew at a 2.1% pace in the third quarter.
(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)
