US retail sales have a strong November, and Q4 growth prospects

As Christmas Shopping Season got underway last month, Americans had little problem in heading to the stores and spending money.

U.S. retail sales increased more than expected in November as households stepped up purchases of motor vehicles and online merchandise, consistent with strong underlying momentum in the economy as the year winds down...

Retail sales jumped 0.7% last month after an upwardly revised 0.5% gain in October, the Commerce Department's Census Bureau said. Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, advancing 0.5%. Estimates ranged from a 0.1% dip to a 1.0% surge.

Retail sales increased 3.8% year-on-year in November.

Labor market resilience, characterized by historically low layoffs and strong wage growth, is underpinning consumer spending.

So as the President Biden's term winds down, it seems that the consumer economy is doing just fine. In fact, retail sales have especially picked up over the last 6 months after a slow end to 2023 and start to 2024.

November's jump in retail sales was driven by big increases in autos and auto parts (+2.6% on a seasonally-adjusted basis) and by non-store retailers such as Amazon (+1.8%). And both of those sectors have had strong year-over-year gains in each of the last 2 years, in contrast to sectors that have fallen off like bars and restaurants, and health stores.

Also note how dollar sales at gas stations have declined as gas prices have declined over the last 2 years, and that the pandemic-related boom in sporting goods and hobby stores continues to fade.

It's doubly interesting that November sales were this strong with Thanksgiving being as late as possible on the calendar, with Cyber Monday not coming until December. We will see if things stay strong on the retail sales side to round out 2024, which also should portend strong economic growth for Q4 overall.

Let's also see if the strong spending holds up as Trump/GOP take over and prices possibly on the rise with tariffs looming. And let's see if some of the boost in November spending is due to people making purchases to get ahead of those tariffs (raises hand), which could limit spending in 2025.