US retail sales fell signficiantly short of expectations for November, dropping by .6% verses an expected decline of .3%, according to data released on Thursday by the Commerce Department.
A decline in auto sales was one of the main drivers in this decline. Monthly auto sales saw their largest decline of the year, dropping by .2%, despite the drop in inflation.
“There’s not a lot of strength in this report,” Ted Rossman, senior industry analyst for Bankrate, said in a statement. “Nine of 13 categories fell on a month-over-month basis, and big-ticket purchases look especially shaky.”
Furniture and home furnishings stores reported a decrease of 2.6%, building materials and garden centers were down 2.5%, and motor vehicle and parts dealers dropped 2.3%.
Online sales also decreased, falling 0.9%, while bars and restaurants increased 0.9%, and food and beverage stores rose 0.8%.
“With weak global growth and the strong dollar compounding the domestic drag from higher interest rates, we suspect this weakness is a sign of things to come,” Andrew Hunter, senior U.S. economist at Capital Economics, wrote of the retail report.
The Fed is expecting things to get much worse in 2023, with unemployment expected to rise to at least 4.5% by the end of 2023 and 1.5 million fewer people in the workforce.
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