U.S. retail sales post biggest drop in 11 months; labor market tight
Source: Reuters
Macro Matters
4 minute read * December 15, 2022 * 9:46 AM EST * Last Updated an hour ago
U.S. retail sales post biggest drop in 11 months; labor market tight
By Lucia Mutikani
Summary
-- Retail sales fall 0.6% in November
-- Core retail sales drop 0.2%; October sales revised lower
-- Weekly jobless claims decrease 20,000 to 211,000
WASHINGTON, Dec 15 (Reuters) - U.S. retail sales fell more than expected in November, but consumer spending remains supported by a tight labor market, with the number of Americans filing for unemployment benefits decreasing by the most in five months last week.
The biggest decrease in retail sales in 11 months reported by the Commerce Department on Thursday was likely payback after sales surged in October as Americans started their holiday shopping early to take advantage of discounts by businesses desperate to clear excess inventory.
Still, the weakness in sales suggested higher borrowing costs and the threat of an imminent recession were starting to have an impact on household spending.
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Read more: https://www.reuters.com/markets/us/us-retail-sales-fall-more-than-expected-november-weekly-jobless-claims-decrease-2022-12-15/
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progree
(10,909 posts)The latest retail sales reading showed a decline of 0.6% over the prior month but a 6.5% increase from November 2021.
The Commerce Department said on Thursday that retail sales dropped 0.6% last month. Data for October was unrevised to show sales accelerating 1.3%. Economists polled by Reuters had forecast sales dipping 0.1%.
Retail sales are mostly goods and are not adjusted for inflation. Last month's decline in sales suggests holiday shopping was pulled forward into October. Motor vehicle shortages also depressed sales at auto dealerships.
The boost from one-time tax refunds in California, which saw some households receiving as much as $1,050 in stimulus checks in October and Amazon's second Prime Day faded last month. Other factors which hurt sales included the rotation in spending back to services and discounting by retailers eager to lure cash-strapped consumers to clear unwanted inventory.
... Consumers have also been drawing down savings to fund purchases. The saving rate was at 2.3% in October, the lowest since July 2005.
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Various excerpts --
In its latest Summary of Economic Projections released Wednesday, Fed officials said they expect GDP growth at the end of next year to stand at just 0.5% while the unemployment rate is set to rise from its current level of 3.7% to 4.6%.
Asked during a press conference following this announcement whether these forecasts flat growth, rising unemployment imply a recession hitting the economy next year, Powell demurred.
"I don't think it would qualify as a recession...because you've got positive growth," Powell said.
Though as NBC's Brian Cheung noted in his question to Powell, the Fed's unemployment forecasts suggest some 1.6 million Americans are going to lose their jobs in the next year.
"The expected increase in the unemployment rate between this year and next has never happened without the economy falling into a recession," Ryan Sweet, chief U.S. economist at Oxford Economics, wrote in a note on Wednesday.
More: https://finance.yahoo.com/news/the-fed-doesnt-think-its-recession-forecast-is-forecasting-recession-morning-brief-103037537.html
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They're not happy with Fed Chair Powell's hawkish remarks and a higher forecast terminal Fed Funds rate than was forecast 3 months ago. And the retail sales is not well received either, according to the pundits.
mahatmakanejeeves
(57,513 posts)NT
progree
(10,909 posts)SouthernDem4ever
(6,617 posts)Especially food prices. The Publix game seems to be double the prices and give a two for one sale on a few products once in a while which allows you to pay the price it was before it over-inflated - but only temporarily.
FredGarvin
(478 posts)They are increasing at a slightly lower rate.
It's brutal for working families and individuals alike.
SouthernDem4ever
(6,617 posts)It doesn't make much sense, unless it's mostly greed and taking advantage of consumers.
louis-t
(23,295 posts)Fuel prices are back to normal. I noticed fast food places are not nearly as busy as they were. Even during times they should be busiest, there are no cars in the drive thru. Went to Arby's the other day, they no longer have the sandwich I like so I ordered another one. Almost $8. For one small sandwich. I told them to forget it and left. I've been buying lunch meat at the corner Farmer's Market. It's $5 a pound cheaper than Kroger. Certain other items, while priced similar to Kroger, are fresher because they didn't sit in a warehouse for 5 days before getting to the store. If you want prices to come down, stop buying things you don't really need that are over priced. The prices will come down.
A simple lunch for my family of four in our favorite restaurant has gone from around $60 to about $110.
Can't do it anymore
NoMoreRepugs
(9,436 posts)Philly Fed manufacturing survey shows inflation pressures at 27-month low - yet Fed says we need to curb wage growth. Welcome to America.