US retail sales fell more than expected in November, notching the biggest monthly decrease since December 2021.
Sales, which include spending on food and fuel, fell 0.6 per cent from the previous month to $689.4bn, according to data released by the Census Bureau on Thursday. Economists had expected a modest 0.1 per cent decrease.
November’s decline followed an October reading of a 1.3 per cent increase, the biggest monthly jump in sales since the start of the year.
Retail sales were still up 6.5 per cent from a year ago, but the data are not adjusted for inflation, which could be driving some of the increase as consumers face higher prices.
However, inflation fell to its lowest level since December 2021 as cost increases finally cool, largely driven by subsiding petrol and used car prices.
Retailers such as Walmart and Dollar General have reported that consumers have started to shift their shopping behaviour, spending more on essentials like food and less on discretionary items such as electronics and furniture to navigate the higher prices.
Spending at furniture stores, building material and garden shops and motor vehicle and parts dealers fell 2.6 per cent, 2.5 per cent and 2.3 per cent from the previous month, respectively.
Consumers prioritised spending on essentials, with sales up at food and beverage stores and health and personal care stores last month.
The so-called retail control group, which excludes building materials, motor vehicle parts and petrol station sales, declined 0.2 per cent, missing economists’ expectations of a 0.2 per cent increase.
A slowdown in consumer spending could be good news to the Federal Reserve as its officials seek to combat inflation by raising interest rates to damp down demand.