U.S. retail sales rose 0.6% in November from the prior month, the Commerce Department reported Wednesday, beating expectations and signaling that holiday spending accelerated after a revised 0.1% decline in October. Year-over-year, retail and food-service sales were up 3.3%, according to Commerce Department data. The report arrived more than a month late, delayed by the 43-day federal government shutdown that stalled several economic data releases.
The November reading offers a partial measure of consumer resilience heading into 2026, though weak hiring and tariff uncertainty continue to cloud the outlook — particularly for lower-income households that remain under financial strain.
Shoppers Shifted to Gift Categories
Consumers concentrated spending on gifts and away from big-ticket household items, the Commerce Department data showed. Sales at sporting goods and hobby stores led sectoral gains at 1.9%, followed by clothing and accessories at 0.9%. Restaurants posted a 0.6% uptick and online businesses gained 0.4%.
Categories tied to the home lagged. Furniture and home furnishing stores dipped 0.1%, and consumer electronics and appliance stores recorded no change from October.
A closely watched control group — which strips out volatile categories including gasoline, automobiles, and restaurants and is seen as a gauge of discretionary demand — rose 0.4%.
The retail figures are not adjusted for inflation.
‘Gloomy, but Still Spending’
“Consumers are gloomy, but they are still spending,” said Heather Long, chief economist at Navy Federal Credit Union. “The only areas they are pulling back in are home improvement, home furnishings and some electronics and appliances. Outside of those areas, consumers continue to spend and they are likely to keep that up in early 2026 as they receive larger-than-normal tax refunds.”
Long’s assessment captured a tension running through the National Retail Federation’s annual convention in New York, where roughly 41,000 attendees from retailers, brands, and technology companies gathered as the industry weighed a solid holiday season against mounting uncertainties. Tariff policy under President Donald Trump and a softening job market dominated discussions.
Holiday Season Projection
The National Retail Federation projected that retail sales for November and December combined grew between 3.7% and 4.2% over 2024, a range of $1.01 trillion to $1.02 trillion. By comparison, holiday sales for 2024 rose 4.3% over 2023 to $976.1 billion. Final results for the two-month holiday period will not be available until next month, when December retail figures are released.
Early signals from individual chains were cautiously positive. Lululemon Athletica said Monday it expected fourth-quarter profit and revenue to land at the high end of its previously released guidance, citing a solid holiday season. Abercrombie & Fitch said both its Hollister and Abercrombie brands performed well in the period. A more complete picture of holiday spending will emerge when Walmart, Macy’s, and other major retailers report fiscal fourth-quarter results next month.
Inflation Backdrop
Separate Labor Department data released Tuesday showed consumer prices rose 0.3% in December from November; core prices, which exclude food and energy, rose 0.2% — matching November’s pace in both cases. Many economists had anticipated inflation to jump when the government resumed normal data collection after the shutdown, so the restrained figures came as a relief.
The price of manufactured goods was flat in December, a signal, the Associated Press reported, that tariff effects may be starting to fade.
Hiring Remains a Headwind
Despite the November spending beat, weak hiring remains a concern for the broader economic outlook. The industry saw many lower-income households enter the new year in financial difficulty even as middle- and upper-income consumers continued to spend. Retailers and economists at the NRF convention cited anxiety over tariff-driven price increases as a persistent drag on consumer sentiment heading into 2026.