WASHINGTON (AP) — Consumers stepped up their spending at retail stores last month, providing a boost to the economy in the early phases of the winter holiday shopping season.
Retail sales rose 0.7% in November, the Commerce Department said Tuesday, a solid increase and higher than October's 0.5% gain. Sales jumped 2.6% at auto dealers, driving most of the gain. Some of that demand likely reflected a need for new cars in parts of the southeast slammed by Hurricane Helene in October, as well as healthy incentives provided by car dealers. Big discounts at many retail chains also attracted some consumers.
The boost in spending underscores that the economy is still growing at a healthy pace even with higher interest rates, a trend that could cause the Federal Reserve to lower borrowing costs more slowly next year than they have previously signaled. The Fed will announce its latest rate decision Wednesday.
At the same time, there were some signs of consumer caution, as sales at grocery stores, clothing shops, and restaurants fell. Outside of car dealers and online retailers, sales gains were modest.
“We ultimately expect this will be a decent holiday sales season for retailers,” Tim Quinlan, an economist at Wells Fargo, said in a note to clients. “It’s not going to knock anyone’s socks off in the wake of record pandemic gains, but continued consumer momentum means it’s unlikely to be overly weak either.”
The economy expanded at nearly a 3% annual pace in the July-September quarter and some economists forecast steady growth in the final three months of this year as well. There are some signs of sluggishness in the job market, as hiring has weakened since early this year, but layoffs are also relatively rare and the unemployment rate is at a low 4.2%. Paychecks are growing a solid 4% pace, on average nationwide, which is modestly faster than inflation and helps fuel more spending.
Sales rose modestly at stores selling furniture, electronics, and home and garden supplies. Since the retail sales report isn't adjusted for inflation, some of the increase reflects higher prices. Sporting goods stores reported a 0.9% gain. Sales at online retailers jumped 1.8%.
Spending at restaurants and bars, meanwhile, dropped 0.4%, a sign that consumers did pull back in one discretionary category. Grocery store sales also dipped 0.2%.
On Wednesday, the Fed is expected to cut its key rate for a third time this year, after a big half-point cut in September and a quarter-point last month. But Fed officials, led by Chair Jerome Powell, are also expected to signal that they may reduce their rate only two or three times next year, leaving it far above its pre-pandemic level, when rates on mortgages, auto loans, and credit cards were much slower.
The retail sales report comes as retailers are stepping up deals and other perks to get shoppers into their stores for the crucial final stretch before Christmas.
Analysts envisioned a solid holiday shopping season, though perhaps not as robust as last year’s, with many shoppers under pressure from still-high prices despite the easing of inflation. Overall, retailers had a decent start to the unofficial kickoff to the holiday shopping period despite lots of discounts and sales that started as early as October.
Adobe reported earlier this month that “cyber week” — the five-day period from Thanksgiving to Cyber Monday — brought in $41.1 billion online overall, up 8.2% from the year-ago period. Adobe expects full holiday season sales — Nov. 1 to Dec. 31 — to hit $240.8 billion, up 8.4% compared to a year-ago. And Mastercard SpendingPulse, which tracks in-person and online spending, reported that overall Black Friday sales excluding automotive rose 3.4% from a year ago.
This year, retailers are feeling more pressure since there are five fewer days between Thanksgiving and Christmas. Moreover, the presidential election caused some distraction from shopping, sending sales of general merchandise down 9% in the two weeks ended Nov. 9, according to Circana, a market research group.
Sales have been rebounding but stores will still have to make up for those losses. But there are big shopping days ahead. In the United States, the top 10 busiest shopping days account for about 30% to 40% of all holiday retail traffic, according to Sensormatic Solutions, which tracks foot traffic at retail stores. And six of the top ten busiest days during the holiday season are still ahead, including the day after Christmas, Sensormatic noted.
Spencer Jordan, senior vice president of leasing at Easton Town Center in Columbus, Ohio, said that foot traffic is unchanged from a year ago, but sales are up.
There were steady crowds over the weekend at the Newport Centre Mall in Jersey City, New Jersey, anchored by Macy’s and Kohl’s, with huge discounts being offered at a number of them.
Abraham Ferreyra and his wife purchased two coats Sunday that were on sale for $15 each and said they plan to cut spending on gifts.
“We have a mortgage to pay,” he said. “So we can’t be giving too much.”
This story has been updated to correct that six of the top busiest shopping days during the holiday season are ahead, not five.
FILE - Coffee makers sit on display in a Best Buy store Nov. 21, 2024, in south Denver. (AP Photo/David Zalubowski, File)
Shoppers pass by electric bicycles on display in a Cabela's sporting goods store Sunday, Dec. 8, 2024, in Lone Tree, Colo. (AP Photo/David Zalubowski)
A blast of snow, ice, wind and plunging temperatures stirred up dangerous travel conditions in parts of the central U.S. on Sunday, as a disruptive winter storm brought the possibility of the “heaviest snowfall in a decade” to some areas.
Snow and ice blanketed major roadways in nearly all of Kansas, western Nebraska and parts of Indiana, where the state's National Guard was activated to help any motorists who were stuck. At least 8 inches of snow were expected, particularly north of Interstate 70, as the National Weather Service issued winter storm warnings for Kansas and Missouri, where blizzard conditions were reported. The warning extended to New Jersey for Monday and into early Tuesday.
“For locations in this region that receive the highest snow totals, it may be the heaviest snowfall in at least a decade,” the weather service said early Sunday.
About 63 million people in the U.S. were under some kind of winter weather advisory, watch or warning on Sunday, according to Bob Oravec with the National Weather Service.
The polar vortex of ultra-cold air usually spins around the North Pole. People in the U.S., Europe and Asia experience its intense cold when the vortex escapes and stretches south.
Studies show a fast-warming Arctic is partly to blame for the increasing frequency of the polar vortex extending its icy grip.
In Indiana, snow fully covered portions of Interstate 64, Interstate 69 and U.S. Route 41, prompting Indiana State Police to plead with motorists to stay off the roads as plows worked to keep up with the pace of the precipitation.
“It’s snowing so hard, the snow plows go through and then within a half hour the roadways are completely covered again,” Sgt. Todd Ringle said.
Part of I-70 was closed in central Kansas by Saturday afternoon. Roughly 10 inches (25 centimeters) of snow had fallen in parts of the state, with snow and sleet totals predicted to top 14 inches for parts of Kansas and northern Missouri.
Parts of upstate New York saw 3 feet (0.9 meters) or more of snow from a lake effect event expected to last until late Sunday afternoon.
The storm was then forecast to move into the Ohio Valley and reach the Mid-Atlantic states on Sunday and Monday, with a hard freeze expected as far south as Florida.
The National Weather Service warned that travel in numerous states, including Kansas and Missouri, could be “very difficult to impossible.”
Indiana State Police reported a handful of spinouts and crashes Sunday.
A day earlier a fire truck, several tractor-trailers and passenger vehicles overturned west of Salina. Rigs also jackknifed and went into ditches, state Highway Patrol Trooper Ben Gardner said. He posted a video showing his boots sliding across the highway blacktop like he was on ice skates. He begged people to stay off the roads.
Governors in neighboring Missouri and nearby Arkansas declared states of emergency.
The storms also caused havoc for the nation’s railways, leading to cancelations. Amtrak said in a statement that “adjustments have been made with no alternative transportation being offered” for many rail lines.
More than 20 cancelations were predicted on Sunday and more than 40 were planned for Monday.
The cancelations affected many parts of the country, but the Midwest was hit especially hard. A train between Chicago and New York and several regional trains between Chicago and St. Louis were among those canceled Sunday.
Nearly 200 flights in and out of St. Louis Lambert International Airport were canceled, according to tracking platform FlightAware.
Starting Monday, the eastern two-thirds of the country will experience dangerous, bone-chilling cold and wind chills, forecasters said. Temperatures could be 12 to 25 degrees (7 to 14 degrees Celsius) below normal.
In Chicago on Sunday, temperatures hovered in the teens (minus 7 to 10 Celsius) and around zero in Minneapolis, while dropping to 11 below in International Falls, Minnesota, on the Canadian border.
The Northeastern states are more likely to experience several days of cold following what has mostly been a mild start to winter, said Jon Palmer, a meteorologist with the National Weather Service in Gray, Maine. A plume of cold air coming down from Canada is likely to result in a cold but dry week, he said.
The cold air will likely grip the eastern half of the country as far south as Georgia, Palmer said, with parts of the East Coast experiencing freezing temperatures and lows dipping into the single digits in some areas.
Wind might also pick up as the week gets going, making for potentially dangerous conditions for people exposed to the elements for long periods of time, Palmer said.
The National Weather Service predicted 8 to 12 inches (about 20 to 30 centimeters) of snow for the Annapolis, Maryland, area, with temperatures remaining below freezing throughout the weekend.
In a statement on X, Virginia Gov. Glenn Youngkin declared a state of emergency Friday evening ahead of the storm and encouraged residents to vote before the state's special elections on Tuesday.
Similar declarations were issued in Kansas, Kentucky, Maryland and in central Illinois cities.
“This is the real deal,” meteorologist John Gordon said at a press conference in Louisville, Kentucky. “Are the weather people blowing this out of proportion? No.”
Read more of AP’s climate coverage at http://www.apnews.com/climate-and-environment
Associated Press journalists Julie Walker in New York, Sophia Tareen in Chicago and Summer Ballentine in Columbia, Missouri, contributed. Witte reported from Annapolis, Maryland. Whittle reported from Portland, Maine.
Snow falls in St. Joseph, Mo., Sunday, Jan. 5, 2025. (AP Photo/Nick Ingram)
More snow falls near the American Legion Post in Lowville, N.Y., Sunday, Jan. 5, 2025. (AP Photo/Cara Anna)
FILE - A leaf is frozen in the ice of a garden pond during cold weather in Buffalo Grove, Ill., Thursday, Dec. 12, 2024. (AP Photo/Nam Y. Huh, File)
FILE - Steve Beckett with the street department in Owensboro, Ky., sprays a salt brine solution along Hickman Avenue in preparation for predicted snow and ice over the weekend, Friday, Jan. 3, 2025, in Owensboro, Ky. (Greg Eans/The Messenger-Inquirer via AP, File)
More winter weather blows into Lowville, New York on Saturday, January 4, 2025. (AP Photo/Cara Anna)
In a photo released by the Kansas Highway Patrol, a car is wedged between two trucks during icy weather Saturday, Jan. 4, 2024, in Salina, Kansas. (Kansas Highway Patrol via AP)
A snowplow passes through Lowville, New York, on Saturday, Jan. 4, 2025. (AP Photo/Cara Anna)
