New data from the Census Bureau recently revealed that retail sales in November were lower than initially expected and only rose by about 0.3%. Previously, analysts expected November’s gain to be closer to 0.8%. However, while retail sales slowed down in November — even with the massive holiday shopping expected — October’s retail sales were revised higher than first recorded.
This could signal that more Americans began their holiday shopping early in October this year, rather than wait until later. Of course, December’s retail sales will help understand how Americans shopped during the holiday season this year.
Because of the global supply chain problems that continue to persist, analysts warned both consumers and businesses that the country could experience low stock and empty shelves this year. After hearing this, many consumers decided to start shopping for the holiday season early to ensure that they are able to get the items desired for their December holidays. This could be why retail sales were higher in October than they were in November.
However, it is worth noting that huge sales — Black Friday and Cyber Monday, most notably — occur during November. Previous data hinted that consumer interest in these two massive events slowed down this year, possibly because some businesses didn’t offer big sales as a result of their lower stock.
Retail sales did increase in some categories, though. For example, sales were strongest in November in the gasoline and food and beverage sales.
While retail sales did slow down in November, economists are still optimistic that consumers are willing to spend money for the rest of the year during the peak holiday season. There’s no data to signal that retail sales will not increase, even if these sales do slow down.
Consumers will likely spend the most money they have in a while during 2021’s holiday season as a result of high inflation and higher prices of goods. Prices of goods have increased in the past few months for a variety of reasons. The global supply chain is one of the main reasons why so many items have increased in price, as it has begun to cost a lot of money to ship goods amid so many issues in the chain.
However, even with these known increases in prices, economists are optimistic that consumers will continue to spend money in December — and likely be willing to. Even with the higher increase in goods, consumers will spend money into the new year. However, once the new year hits and the holiday spending slows down, economists are interested to see how consumers continue to spend money.
If high inflation moderates over the next few months, this could also help with the price consumers are having to pay on items. One of the main thing economists are looking at is the global supply chain and its many issues. If the supply chain ceases to be an issue — if the many problems that plague the chain as a whole are finally straightened out — then this will only help businesses and consumers both.