Consumers Get Grinchy, Sharply Reining In Spending

Retail and restaurant sales dipped 0.6% in November, according to the U.S. Commerce Department, the biggest decline yet this year. It’s also a more significant drop than the 0.3% forecast by Dow Jones, indicating that consumers’ resilience is wearing thin.

The figures are adjusted for seasonal variation and holiday and trading-day differences, but not for inflation. Sales came in at $689.4 billion, down 0.6% from the previous month. When compared to November of 2021, they are 6.5% higher.

That news, along with a recent interest rate hike and the first drop in manufacturing output since June, is likely rattling retailers.

But the National Retail Federation is looking at the numbers differently and says that despite the decline, sales for the first half of the holiday season are solid. And it says part of the decline stems from forward-thinking shoppers who hit the stores in October to find better deals.



 “Consumers continued to spend on household priorities and holiday gifts for loved ones this November despite continued inflation and rising interest rates,” NRF President and CEO Matthew Shay says in a release issued shortly after the release of the sales decline.

“Consumers have been shifting back to in-store shopping for a more traditional holiday shopping experience, and we expect record participation for this year’s Super Saturday shopping weekend.”

The NRF, which counts November as the first half of the holiday season, says the numbers are on track with its predictions that 2022 holiday sales will increase between 6% and 8%. And even if it comes in at the low end, at $942.6 billion, it would beat last year’s record of $889.3 billion.

On a monthly basis, sales fell in seven out of nine categories, including online spending, building materials and garden supply stores, sporting goods, general merchandise, apparel, electronics and appliances.

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