It looks like inflation may be stifling some of our holiday shopping spirit.
Retail sales edged up 0.3% from October to $639.8 billion, the Census Bureau reported Wednesday, falling short of the 0.8% growth that economists expected. Worse yet, it was actually a 0.5% decline once inflation was taken into account.
Electronics and appliance stores took the biggest hit out of all the major categories, posting a 4.6% decline. Bars and restaurants saw a 1% gain in spite of the emergence late in the month of a new COVID-19 variant.
The report suggests consumers are starting to change their shopping habits in response to inflation, which is higher than it’s been since the 1980s and impacting all sorts of spending areas. The high cost of necessities like groceries and gas (down a bit in the past few weeks but still more than $1 higher a gallon than a year ago) may be forcing people to make tough choices, some economists said. Another theory is that we all heard about those supply chain problems and did a lot of our shopping early.
“If the pricing pressures accelerate much higher, this might not be quite the strong finish to the year many were expecting,” Edward Moya, senior market analyst at OANDA, wrote in a commentary.
Have a question, comment, or story to share? You can reach Diccon at email@example.com.