Retail Sales Flop Reflects Delayed Pivot to Services

Source: Economics Group of Wells Fargo Bank, N.A.Summary November’s retail sales report was ugly. Sales in categories more reliant on credit started to turn and holiday sales categories flopped. While we expect spending to contract in 2023, it’s too soon to call this the start of a sustained decline in goods spending and, importantly, demand for services is still holding up. Days of Low Cost Financing Are Over Is the staying power of the consumer finally succumbing to the inevitable? For the better part of the past year consumers have been confronted by high inflation that more often than not has outpaced their income. For the past nine months, consumers have also witnessed the disappearance of easy money and 0% financing as the Federal Reserve has raised rates faster over such a short period than any time since the early 1980s. There have been moments over that time period where retail sales wavered, but this is the largest monthly decline of the year. READ FULL ARTICLE>>