US retail sales grew by 0.3% in November, down October’s growth of 1.7%, amid an inflation spike that has raised prices of all products, Commerce Department data showed on Wednesday.
“Advance estimates of US retail and food services sales for November 2021, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $639.8 billion, an increase of 0.3 percent from the previous month,” the Commerce Department said in a release.
Economists polled by US media had forecast retail sales to grow by 0.8% in November, showing a miss in expectations.
However, annual retail sales remained strong, growing 18.2% from November 2020, in the face of the economic recovery from the coronavirus pandemic.
In the monthly reading, almost every major component of retail sales grew at a slower pace or fell last month compared with October. Automobile sales increased 0.3% from the prior 0.9%. The electronics sector saw a 4.6% drop and general merchandise stores registered a 1.2% decline.
The economy shrank by 3.5% for all of 2020 due to shutdowns and other disruptions caused by the COVID-19 crisis. Growth this year has been spotty, with an annualized 3.5% expansion in the first quarter, 3.6% in the second and 2.0% in the third.
The Federal Reserve announced in March that it expected a 6.5% economic expansion for all of 2021 and has not changed its target despite the uneven growth in the past three quarters. The problem for the central bank though is inflation running at near 40-year highs as prices of almost everything have soared from the lows of the pandemic due to higher wage demands and supply chain disruptions.
US consumer prices were up 6.8% in the year to November, for their fastest growth since 1982. Producer prices, meanwhile, jumped by a record 9.6% last month, year-on-year.
