Despite widespread inflation and supply chain slowdowns, American spending patterns have been on the upswing. That growth, however, appears to have slowed somewhat in November and could be further threatened by the spread of the Omicron variant.
Consumer spending rose 0.6%, or by $104.7 billion, in November compared to October, according to Thursday data from the Commerce Department. In October, personal household spending rose 1.3% compared to September.
In general, the spending increase was seen in categories such as housing and utilities services as well as gasoline and motor vehicles. As experts predicted, widespread shortages from supply chain delays prompted consumer to complete their holiday shopping earlier than usual in October, which might have accounted for the slowdown in spending growth in November.
Still, November was a strong month for retail sales overall, with sales for the month at $639.8 billion, marking a 0.3% jump from October, according to a monthly report from the U.S. Census Bureau. Sales growth in November was led by increases in clothing, sporting goods and furniture stores, NRF data showed. Sales at clothing and clothing accessory stores were up 0.5% month-over-month.
The recent growth in household spending also comes amid a period of record inflation. Consumer prices rose by 6.8% in November compared to a year ago, according to the Bureau of Labor Statistics’ monthly report. This number represents the highest inflation rate since the 12-month period ending in June 1982.
Online prices in November also rose a record 3.5% compared to 2020, according to Adobe data. This growth marks the highest price jump recorded by Adobe since 2014, when it started recording digital sales.
Personal income increased 0.4% in November, as employers increase wages across industries to fill roles in a competitive labor market. However, the recent uptick in COVID-19 cases and the threat of the Omicron variant might slow income growth for workers who need to stay home. COVID-19 related shutdowns could also impede spending in future months.