U.S. retail sales fell sharply

The Commerce Department reported that U.S. retail sales plummeted by 0.6% in November. 

A key driver behind this drop has been a record decline in automobile sales over the year. However, without taking it into account, the total number of sales fell by 0.2%. 

Backed by the Refinitiv consensus forecast, economists predicted a 0.1% drop in sales. The previous estimate showed a 1.3% growth in October.

In November, retail sales, not adjusted for inflation, rose 6.5% from a year earlier, being the lowest gain since 2020, as reported by Ted Rossman, senior analyst at Bankrate.

The expert mentioned that 9 out of 13 categories recorded a drop in sales during the last month. The decline in big-ticket purchases appeared to be the most significant. 

Consumers in the U.S. have to buy essential items. But rising prices for these goods forced Americans to cut spending in other sectors. Meanwhile, the cost of groceries is still higher than the overall inflation rate in the country. Therefore, consumers tend to spend less this holiday season and buy gifts for fewer people.