November Retail Sales Surpass Expectations
Retail sales in the United States saw a significant increase in November, defying economic concerns and a decelerating labor market. According to the Commerce Department, sales rose by 0.6% in November, a notable recovery from October’s revised 0.1% decline. This figure surpassed economists’ expectations of a 0.4% increase, as reported by FactSet.
Retail Sector Performance
Sales growth was observed across various categories as the holiday season approached.
- Specialty shops experienced the highest increase at 1.9%.
- Gas stations saw a rise of 1.4%.
- Home improvement stores reported a 1.3% increase.
A measure that filters out volatile elements, known as the control group, also rose by 0.4%, far exceeding predictions of a 0.1% decline.
Declines in Specific Categories
Only two categories reported a decline in November:
- Furniture stores: down by 0.1% from October.
- Department stores: down significantly by 2.9%.
The report was delayed by a month due to last year’s government shutdown. Notably, the sales figures account for seasonal fluctuations but do not adjust for inflation.
Impact of Consumer Behavior on the Economy
The resilience of the US economy throughout 2025 is evident despite governmental policies and a slowing labor market. Consumer spending, which constitutes approximately two-thirds of the economy, remains robust.
Experts anticipate economic acceleration in 2026, particularly with the influx of tax refunds. David Russell, TradeStation’s global head of market strategy, noted, “The consumer ended 2025 on a strong note and may strengthen further with tax refunds.”
Tax Refund Expectations
Wells Fargo Investment Institute projects $517 billion in tax refunds for the current year, marking the largest issuance since 2017, excluding pandemic-era stimulus payments. JPMorgan Asset Management estimated that incoming tax returns could contribute an additional 0.8% to real GDP growth in early 2026.
Heather Long, chief economist at Navy Federal Credit Union, remarked that households could see tax refunds ranging from $500 to $1,000 greater than usual, providing extra financial flexibility.
Labor Market Outlook
Economists agree that the US labor market is unlikely to suffer major setbacks in 2026, supported by improving economic policies and strong consumer spending. Federal Reserve officials project unemployment to peak around 4.4% in 2026.
New York Fed President John Williams emphasized a gradual stabilization in unemployment rates, stating, “There are no signs of a sharp rise in layoffs.”
