WASHINGTON, D.C. — US retail sales increased in November, according to government data released on Tuesday, as consumer spending picked up more than expected after a lull amid bad weather.
Sales rose 0.7 percent in November from a month earlier to $724.6 billion, up from a revised 0.5 percent in October, the Department of Commerce said in a statement.
This was above the market consensus of a 0.5-percent increase, according to Briefing.com.
Consumer spending has been a key driver of the economy, as Americans continue shelling out money despite the Federal Reserve’s (Fed) decision to hike interest rates to a two-decade high in a bid to quash inflation.
High interest rates typically act as a brake on the economy by drying up demand.
Inflation has fallen sharply over the past two years, but recently ticked higher and remains stuck stubbornly above the Fed’s long-term target of 2 percent.
At the same time, growth remains strong, and the labor market is still in relatively good health.
Against this backdrop, the Fed is widely expected to announce a third consecutive rate cut on Wednesday while signaling that it expects to slow the pace of easing going forward.
“For all the economists who are too afraid to say that the economy does not need a rate cut right now… this report is an uncomfortable fact,” economists at High Frequency Economics wrote in a note to clients.
In November, retail sales excluding those at gas stations rose 0.7 percent from a month earlier, while motor vehicle and parts dealers saw a sharp 2.6-percent rise, according to Commerce Department data.
There was a sharp 3.5-percent monthly decline in spending at miscellaneous store retailers, and a smaller 0.4-percent fall in the value of purchases at food services and drinking places.
Year on year, retail sales rose by 3.8 percent in November.
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