• Retail sales to rise for the second month in November.
  • Strong payrolls and wages expected to support consumption.
  • Control group to sustain its robust recent expansion.

The US Census Bureau will issue its advance report on Monthly Sales for Retail and Food Services for November on Friday December 13th h at 13:30 GMT, 8:30 EST.


Retail sales are expected to rise 0.5% in November following October’s 0.3% increase. The retail sales control group, the Bureau of Economic Analysis’ GDP component is predicted to climb 0.3% as it did in October. Sales ex-autos are projected to increase 0.4% after a 0.2% gain in October.

Retail sales and the labor market

The job market and wages are the primary supports of consumer spending and both had a strong November.

Non-farm payrolls soared 266,000 far more than the 180,000 forecast and the totals for September and October were revised up by 41,000. The three-month average for NFP jumped to 205,000 last month marking a substantial recovery from July’s 135,000 that had tinged the late August recession scare from the briefly inverted Treasury yield curve.

Annual average hourly earnings rose 3.1% making it the 16th straight month that wage increases have been at or above 3.0%. October’s gain was adjusted to 3.2% from 3.0%.

Annual Average Hourly Earnings


Unemployment returned to 3.5% matching the lowest rate in 50 years and the 21 months at or below 4% is the longest stretch since the late 1960s.

Consumption is directly tied to the availability of jobs and income.  Under the long-running labor expansion consumers have the income and confidence in employment that enables household spending.

Retail sales and consumer sentiment

Consumer attitudes have naturally enough been bolstered by the excellent job market. The Michigan Consumer Sentiment Index reached 99.2 in its preliminary reading for December. That is its best score since May 2018 and in line with the elevated measures of the last three years.  It has been the survey’s current conditions index that has seen the highest sustained levels over the past three years.

Americans have not been as pleased with their economic conditions as they are now in over two decades.

Federal Reserve and the dollar

The Fed’s stable rate policy extended in theory through the end of 2020 in the December economic projections cost the dollar half-a-figure after the FOMC on Wednesday. The euro rose from 1.1095 to 1.1145 after the rate announcement at 2:00 EST.  Chairman Powell’s surprise assertion that he would want to see a sustained increase in inflation before contemplating a rate increase may have been more damaging since the underperformance of prices has been one of the constants of the post-recession US economy. 

The three 0.25% reductions in the fed funds from July to October were, according to the Fed, to protect the US economy and the labor market from external threats, the China trade war, the global economic slowdown and Brexit.  While none of those problems have vanished the Fed judged them sufficiently diminished to halt its easing.

The Fed did not cut rates in the summer because the consumer economy was faltering. The central bank has now said that, in effect, it will not raise rates even if the consumer goes on a tear.  If the US economy starts to accelerate, no doubt the Fed will downplay its inflation watch and revert to a wider data dependency.  


The labor market should continue to fund a healthy consumer sector. Jobs, wages and unemployment have given households every reason to be expansive heading into the holiday season.

If the two long running problems for the global economy, Brexit and the China trade war are settled, or at least removed as a source of overriding concern, expect even more out of the US consumer.



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