November Retail Sales Surge Past Expectations
Sales at US retailers experienced a robust increase in November, even amid concerns regarding the economy and a decelerating labor market. Retail sales increased by 0.6% in November, according to the report on Wednesday, a significant rise from October’s adjusted decline of 0.1%. That exceeded the 0.4% increase that economists had anticipated in a poll. Sales experienced an increase across various categories at the onset of last year’s holiday season, with the most significant rises observed at specialty shops (1.9%), gas stations (1.4%), and home improvement stores (1.3%). A measure that excludes volatile components, referred to as the control group, increased by 0.4% in November, significantly surpassing economists’ predictions of a 0.1% decrease. In November, spending decreased in just two categories: At furniture stores, there was a slight decline of 0.1% from October; meanwhile, department stores experienced a significant drop of 2.9%.
The report experienced a delay of one month due to the unprecedented government shutdown that occurred last year. The figures have been adjusted for seasonal fluctuations, yet inflation remains unaccounted for. Between September and November, consumer prices increased by 0.2%, indicating that retail sales rose by 0.3% during that timeframe, once inflation was taken into account. The latest spending figures highlight the resilience of the US economy throughout 2025 amid President Donald Trump’s sweeping economic policies and disruptions like the government shutdown. According to various polls and surveys, Trump’s policies and a slowing labor market have impacted Americans’ attitudes toward the economy; however, people have continued to spend. Consumer spending is vital, representing approximately two-thirds of the US economy, with retail sales constituting a significant portion of that expenditure.
The US economy is anticipated to pick up momentum in 2026, particularly as tax returns start to arrive in Americans’ pockets. “The consumer ended 2025 on a strong note (and) might get stronger when tax refunds start hitting in the new year,” David Russell stated in an analyst note Wednesday. Analysts anticipate that $517 billion in tax refunds will be issued this year, marking the largest refund year since 2017, aside from the years that included pandemic-era stimulus payments. US economic growth may see advantages from the tax law enacted by Congress last year under Trump, potentially as early as the first quarter of 2026. According to an estimate, the higher tax returns, along with lower withholding anticipated to begin at the start of the year, “could add 0.8% to real GDP growth in the first quarter.”
“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 stated. Economists generally concur that the US labor market is unlikely to experience a drastic downturn in 2026, attributed to diminishing uncertainty surrounding economic policy and strong consumer spending. In their most recent economic projections from December, Fed officials anticipate that unemployment will peak at a low rate of 4.4% in 2026. “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 stated on Monday during an event organized 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.”
