U.S. shoppers pulled back on spending in November compared to the previous month, in the biggest dip in almost a year. And for once, lower prices and sales seem to be part of the story.
Retail spending declined 0.6% last month as holiday shopping kicked into gear, according to the latest report from the U.S. Commerce Department. In October, retail sales had increased 1.3%.
Compared to a month earlier, people spent less on cars and gas, clothes and sporting goods, furniture and electronics. At the same time, spending kept climbing at grocery stores and at restaurants and bars.
All this happened as inflation appeared to slow down. Prices have been easing in many of the same categories: cars, gas, furniture and appliances. In November stores also pushed big sales — on clothes, TVs, computers and smartphones — as they faced a persistent glut of inventory.
As stores pushed discounts on some of the goods, more people also shifted their spending to activities. This, too, may account for some of the retail-spending decline. People are commuting and traveling, going out to eat and party, slowly going to back to more services than goods.