Consumers pulled out their credit cards in November. Let’s discuss the key numbers.
According to the Census Department Advance Estimate, retail sales rose 0.7 percent in November.
Advance estimates of U.S. retail and food services sales for November 2024, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $724.6 billion, an increase of 0.7 percent (±0.5 percent) from the previous month, and up 3.8 percent (±0.5 percent) from November 2023.
Total sales for the September 2024 through November 2024 period were up 2.9 percent (±0.5 percent) from the same period a year ago.
The September 2024 to October 2024 percent change was revised from up 0.4 percent (±0.5 percent) to up 0.5 percent (±0.1 percent).
Retail trade sales were up 0.9 percent (±0.5 percent) from October 2024, and up 4.1 percent (±0.5 percent) from last year. Motor vehicle and parts dealers were up 6.5 percent (±1.8 percent)
The key line above is “adjusted for seasonal variation and holiday and trading-day differences, but not for price changes.” These are nominal sales, not adjusted for inflation.
Month-Over-Month Nominal Details
- Retail Sales: +0.7%
- Excluding Motor Vehicles and Gasoline: +0.2%
- Motor Vehicles: +2.6%
- Food Stores: -0.2%
- Food Service: -0.4%
- Nonstore Merchants (e.g. Amazon): +1.8%
- Gas Stations: +0.1%
Motor vehicles and Nonstore sales account for all of the gain.
Real vs Nominal Advance Retail Sales in Millions of Dollars
Real vs Nominal Advance Retail Sales Detail
Inflation-adjusted sales put things in proper perspective.
However, the last three months are undoubtedly hot at 0.9%, 0.5%, and 0.7% respectively.
This puts another spotlight on Fed rate cuts.
A Data Be Damned Fed Policy
Last month I said “Don’t be surprised if the Fed starts signaling no cut in December. Any additional strong data might do that.” What a hoot on myself.
The odds of a rate cut tomorrow are 95% with more rate cuts still priced in for January and March of 2025.
Of course, the bond market might be pricing in a recession or other economic weakness. Then again, if that was the case, yields on the long end would not be rising.
This is not a data dependent Fed. In fact, there has not been a data dependent Fed for decades.
The Fed announces an intent and sticks with it, data be damned, time and time again except for emergency rate cuts.
Motor Vehicle Sales
It’s important to note that motor vehicle sales are reported when cars are shipped to dealers, not when consumers actually buy them.
This makes it difficult to distinguish what’s going on. One possibility is channel stuffing. By that I mean manufacturers cramming more cars than people are buying down dealers’ throats.
A second possibility is a mad scramble by consumers to buy cars while they can still get a $7,500 EV tax credit.
For discussion of the latter, please see Trump Proposes Killing the $7,500 EV Credit and Seeks Tariffs on Battery Materials
Kiss Biden’s ridiculous energy policies goodbye. We won’t miss them.
How 10-year Treasury Yields Have Changed this Interest Rate Cut Cycle
For discussion of how bond yields are reacting this rate cutting cycles compared to other cycles, please see How 10-year Treasury Yields Have Changed this Interest Rate Cut Cycle