Upside Surprise in November Retail Sales Signals Sustained Consumer

Source: Economics Group of Wells Fargo Bank, N.A. Summary The upside surprise in November retail sales is indicative of the continued staying power on the part of consumers. A decent holiday season looks to be in full swing, though we remain cautious if recent momentum can be sustained in the new year. Santa’s Got a Brand New Bag In the wake of yesterday’s Fed announcement and a growing sense of a pivot in monetary policy, financial markets were prepared to accept a soft print for retail sales. What they got instead was another better-than-expected outturn for November, which is the first of the two critical holiday shopping months. It was not all sunshine and roses, with some downward revisions to the prior month’s control group figures, but on balance today’s report is indicative of continued staying power on the part of consumers despite hand-wringing about growing credit card debt, rising delinquencies and a loss of momentum in the labor market. Total retail sales rose 0.3%, and even factoring in downward revisions to prior data, the level of sales is still higher than what was anticipated by the consensus of over 50 forecasters. Excluding autos and gasoline, sales were up a solid 0.6%. A price-related 2.6% drop at gasoline stations weighed on total sales since the retail data are reported nominally. Broader control group sales, which strips volatile categories, were up 0.4%. READ FULL ARTICLE >>