U.S. retail sales slowed in November, suggesting that inflation is taking a toll on consumers’ wallets during the busiest shopping season of the year.
Total U.S. retail sales were $689.4 billion in November, according to a monthly report from the U.S. Census Bureau. This total was down 0.6% from October but up 6.5% from the same month in 2021. This compares with the 8.3% year over year growth in October and the 8.2% yearly increase in September.
Between September and November 2022, total sales were up 7.7% from the prior year.
The report comes as inflation begins to show signs of cooling. Consumer prices rose by 7.1% in November compared to last year, according to a report from the U.S. Bureau of Labor Statistics. This marked the smallest 12-month increase since the period ending in December 2021 and a slowdown from October’s 7.7% growth.
But with prices still well above last year’s levels, shoppers appear to have cut back their spending. An October survey from consulting firm Gartner found that nearly one-third of U.S. consumers are planning to spend less this holiday season. 28% of consumers said they will be cutting spending as a result of brands raising prices due to inflation, Gartner reported.
Despite November’s slowdown, shoppers came out and spent during Thanksgiving weekend. A record 196.7 million consumers shopped in stores and online during the five days between Thanksgiving Day and Cyber Monday, the National Retail Federation found, marking 17 million more shoppers than last year.
As for the holiday season, NRF is predicting sales to grow, though at a slower rate than last year. Total sales between Nov. 1 and Dec. 31 are expected to grow between 6% and 8% compared to 2021, representing a total of between $942.6 billion and $960.4 billion in sales, on top of last year’s record-breaking 13.5% growth to $889.3 billion.
“Overall, retailers will be pleased with the results which suggest this holiday season will be a good one,” said GlobalData managing director Neil Saunders in a statement. “However, the underlying patterns of slowdown could well present a headache if they accelerate as we enter 2023.”