U.S. retail sales posted solid growth in November, despite concerns about the economy and a slowing labor market.
According to the Department of Commerce, retail sales rose 0.6% from the prior month, well above the revised 0.1% decline in October and above expectations, with economists forecasting a 0.4% gain per FactSet’s survey.
Growth was registered in almost all major categories at the start of the holiday season: the biggest gains were in specialty stores (+1.9%), gas stations (+1.4%) and home improvement stores (+1.3%). The measure that excludes volatile components, known as the control group, rose 0.4% in November, beating expectations.
Spending declined in only two segments: in furniture stores by 0.1% from October and in department stores, where the drop was 2.9%.
The report was delayed by a month due to last year’s government shutdown. The figures are seasonally adjusted, but they are not adjusted for inflation. From September to November, consumer prices rose by 0.2%, meaning that real retail sales for this period rose by 0.3% after inflation is taken into account.
Outlook and analysts’ views
Recent spending underscores the resilience of the U.S. economy in 2025 amid sweeping economic policies of President Donald Trump and government disruptions. Consumer spending has remained resilient, which is important because it accounts for about two-thirds of the U.S. economy, and retail sales play a significant role in these outlays.
Economists expect the U.S. economy to pick up speed in 2026, especially after tax refunds begin to flow to households.
«Consumers ended 2025 on a strong note and are likely to be even stronger as tax refunds begin in the new year.»
– David Russell, Global Head of Market Strategy at TradeStation
Analysts at Wells Fargo Investment Institute expect tax refunds of about $517 billion this year, which would be the largest refunds year since 2017, excluding pandemic-stimulus years.
The U.S. economy could receive an additional boost from the new tax law passed by Congress last year, already in the first quarter of 2026. The rise in refunds and the anticipated reduction in withholdings at the start of the year “could add about 0.8% to real GDP growth in the first quarter,” according to JPMorgan Asset Management.
“The start of 2026 should remain strong as many households receive tax refunds that are $500–$1,000 above normal, creating an additional financial cushion for some purchases or for paying down credit-card debt,” said Heather Long, senior economist at Navy Federal Credit Union, in a commentary released on Wednesday.
Economists are also generally inclined to believe that the U.S. labor market is unlikely to fall sharply in 2026, thanks to easing uncertainty about economic policy and moderate consumer spending. The Federal Reserve, in its latest December projections, expects unemployment to run around 4.4% in 2026.
«I expect the unemployment rate to stabilize this year and then gradually ease over the next few years. I want to emphasize that this has been a gradual process, with no signs of a sharp rise in layoffs or other signs of rapid deterioration.»
– John Williams, President of the New York Fed