Retail spending rises as holiday shopping gains momentum
U.S. retail sales rose 0.6% in November from October as holiday shopping picked up, according to a report from the Commerce Department released after a government shutdown delayed the data. The report said October retail sales were revised to show a 0.1% decline from September.
The Commerce Department’s report, published Wednesday, was delayed more than a month because the shutdown lasted 43 days, and the federal government was gradually catching up on economic reports postponed during that period. Retail sales are described as not adjusted for inflation.
Categories show a gift-led shift
The report said the figures offer only a partial look at consumer spending and do not include many services, including travel and hotel lodges. It said the lone services category, restaurants, registered an uptick of 0.6%.
It also said that in most cases shoppers focused on gifts and pulled away from other areas. Within goods categories, sales at clothing and accessories stores rose 0.9%, while online businesses increased 0.4%. Business at sporting goods and hobby stores was up 1.9%, but furniture and home furnishing stores posted a 0.1% dip. The report said consumer electronics and appliance stores saw their business unchanged in November from October.
Discretionary demand persists, with limits
The report pointed to a category of sales that excludes volatile sectors such as gas, cars and restaurants, saying that measure rose 0.4% in November. The description characterized the increase as a sign that consumers were still spending on discretionary items.
Heather Long, chief economist at Navy Federal Credit Union, said consumers were gloomy but were still spending, adding that the pullback was concentrated in home improvement, home furnishings and some electronics and appliances. She also said that outside those areas consumers continued to spend and were likely to keep that up in early 2026 as they receive larger-than-normal tax refunds.
Retail outlook shaped by prices, tariffs and jobs
The Commerce Department report arrived as the National Retail Federation’s annual three-day convention continued, with the article saying 41,000 attendees from retailers, brands and technology companies were present. The convention discussions, according to the article, included the outlook for shopping during the holiday season amid anxiousness about high prices, the impact of President Donald Trump’s tariffs and a souring job market.
The article also said hiring has generally been weak, a factor that could weigh on consumer spending and the broader economy for 2026. It said the industry wrapped up a “solid holiday shopping season,” based on early data, while adding that many consumers—particularly lower-income households—remained financially strained.
Inflation cools after the shutdown delay
The Commerce Department report came alongside Labor Department inflation data described in the article. It said consumer prices rose 0.3% in December from the prior month, the same as in November, and that core prices rose 0.2%, also matching November.
The article said that at those rates, inflation would be closer over time to the Federal Reserve’s 2% target. It also said many economists had predicted inflation would jump after normal data collection resumed following a six-week shutdown last fall, but described the modest increases as a relief. The article said the price of manufactured goods was flat in December, a sign the impact of tariffs may be starting to fade.
Retail forecast and company updates
The National Retail Federation predicted that retail sales in November and December would grow between 3.7% and 4.2% over 2024. The article said that translated to a range between $1.01 trillion and $1.02 trillion, compared with holiday sales for 2024 rising 4.3% over 2023 to reach $976.1 billion. The trade group said it would not report final results for the November and December period until next month, when the government reports December retail data.
In separate company updates mentioned in the article, Lululemon Athletica said it anticipated fourth-quarter profit and revenue to come in at the high end of its previously released outlook, helped by a solid holiday shopping season. Abercrombie & Fitch also said on Monday that both its Hollister and Abercrombie brands fared well during the holiday season, and the article said a fuller picture would come next month when major retailers report fiscal fourth-quarter results.