Retail sales rose more than expected in November
By Bryan Mena, CNN
Washington (CNN) — Sales at US retailers rose at a solid pace in November, despite jitters about the economy and a slowing labor market.
Retail sales rose 0.6% in November, the Commerce Department said Wednesday, up sharply from October’s downwardly revised 0.1% decline. That was higher than the 0.4% increase economists projected in a poll by data firm FactSet.
Sales were up across categories at the beginning of last year’s holiday season, rising the most at specialty shops (1.9%), gas stations (1.4%) and home improvement stores (1.3%). A measure that strips out volatile components, known as the control group, rose 0.4% in November, trouncing economists’ expectations of a 0.1% decline.
Spending was down in only two categories in November: At furniture stores, which edged down 0.1% from October; and at department stores, which fell sharply by 2.9%.
The report was delayed a month because of last year’s historic government shutdown. The figures are adjusted for seasonal swings but not inflation. From September to November, consumer prices were up 0.2%, which means retail sales were up 0.3% during that period, after adjusting for inflation.
The latest spending figures underscore the resilience of the US economy throughout 2025 in the face of President Donald Trump’s sweeping economic policies and disruptions such as the government shutdown.
Trump’s policies and a slowing labor market have taken a toll on Americans’ attitudes toward the economy, according to various polls and surveys, but people have continued to spend. That’s crucial because consumer spending accounts for about two-thirds of the US economy, with retail sales making up a sizable chunk of spending.
A better outlook in 2026
The US economy is widely expected to gain steam in 2026, especially once tax returns begin to flow into Americans’ coffers.
“The consumer ended 2025 on a strong note (and) might get stronger when tax refunds start hitting in the new year,” David Russell, global head of market strategy at TradeStation, said in analyst note Wednesday.
Analysts at Wells Fargo Investment Institute expect $517 billion in tax refunds to be issued this year, which would be the biggest refund-year since 2017, excluding years of pandemic-era stimulus payments.
US economic growth could benefit from Trump’s tax law passed by Congress last year as soon as the first three months of 2026.
The higher tax returns, coupled with lower withholding expected to take effect in the beginning of the year, “could add 0.8% to real GDP growth in the first quarter,” according to an estimate by JPMorgan Asset Management.
“Early 2026 should remain robust as many households receive tax refunds that are $500 to $1,000 bigger than normal, giving that extra cash cushion for some purchases or to pay off credit card debt,” Heather Long, chief economist at Navy Federal Credit Union, said in commentary issued Wednesday.
Economists also broadly agree that the US labor market likely won’t fall off a cliff in 2026, thanks to easing uncertainty about economic policy and robust consumer spending. Fed officials in their latest economic projections from December expect unemployment in 2026 to top out at a low 4.4% rate.
“I expect the unemployment rate to stabilize this year and then gradually come down over the next few years,” New York Fed President John Williams said Monday at an event hosted by the Council on Foreign Relations. “I should emphasize that this has been a gradual process, without signs of a sharp rise in layoffs or other indications of rapid deterioration.”
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