US retail sales rise less quickly than expected in November

Americans consumed with a little less abandon than expected last month, spending less on automobiles and parts and on electronics.

According to the Department of Commerce, in seasonally adjusted terms, US retail sales volumes rose at a month-on-month pace of 0.3% in November to reach $639.83bn.

Economists had penciled-in an increase of 0.8%.

Sales at motor vehicle and parts dealers dipped by 0.1% versus October and by 4.6% at electronics and appliance stores.

Declines were also seen in spending at health and personal care stores, as well as at general merchandise stores, which registered drops of 0.6% and 1.2%, respectively.

Versus a year ago however, retail sales volumes were ahead by 18.2%.

Retail sales for the month of October were revised higher by one tenth of a percentage point to reveal a month-on-month increase of 1.8%.

The retail sales 'control group', which excludes automobiles, building supplies and gas stations, and which feeds directly into Commerce's GDP estimates, fell by 0.1% on the month (consensus: 0.7%).

However, Mickey Levy at Berenberg Capital Markets noted that control group retail sales were ahead by 7.7% on a quarterly annualised basis "and point to healthy consumption growth in Q4."

"November's retail sales report provides tentative evidence that the mix of elevated and pervasive price increases paired with ongoing supply constraints may have begun to weigh on consumer demand, with real retail sales declining 0.5% m/m," Levy commented.

"It is also likely that some consumers began their holiday shopping earlier than normal this year, reflected in strong m/m retail sales growth at departments stores (2.5%), electronics and appliance stores (3.1%), and non-store retailers (4.1%) in October."

For his part, Ian Shepherdson, chief economist at Pantheon Macroeconomics, chipped in: "These data are not necessarily a reliable guide to the path of spending across the remainder of the holiday season; it’s a marathon, not a sprint.

"Consumers have plenty of cash, so what matters is their strength of their inclination to spend on goods; they might prefer to indulge more in services like entertainment, which are not captured in these numbers. We still expect real consumption to rise at a 7% annualized rate in Q4."