Retail sales in November dropped unexpectedly in the US and October’s numbers were revised lower. According to analysts at Wells Fargo point out that this does signal an impending air pocket for goods spending, but they consider holiday sales are still on track for a big gain.
Key Quotes:
“The timing of the latest surge in COVID cases could hardly be worse going into what is typically the height of the holiday shopping season. Most indicators pointed to a drop in retail sales for November and consensus expectations were braced for a modest decline.”
“Retail sales have definitely slowed down the past two months. Overall sales are now 1.1% below their October level. The key thing to keep in mind is that store spending is still elevated; sales are still up 4.1% from where we were at this time last year.”
“We were expecting a decline in holiday sales for November and would not be surprised to see December post a modest decline as well. But, because it is coming off such a high level of spending earlier this year, a big year-overyear increase is still in the cards.”
“Durable goods spending has been a key driver of this rebound, and they call it durable for a reason. It lasts, in some cases for years. With all this demand pulled forward we expect to hit an air pocket in goods spending in the months ahead, especially as spending begins to shift to the service sector once the vaccine is widely distributed.”
Share
