November retail sales top Wall Street’s expectations

November retail sales grew at a faster pace than Wall Street analysts had expected, reflecting continued resilience in the American consumer and indicating that the holiday shopping season in the US is off to a strong start.

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Retail sales rose 0.7% in November. Economists had expected a 0.6% rise in spending, according to Bloomberg data. Meanwhile, retail sales in October were revised up to a 0.5% increase from a prior reading that showed a 0.4% increase in the month, according to Census Bureau data. A 2.4% month-over-month increase in motor vehicle and auto parts sales, as well as a 1.8% increase in online sales, drove the gains.

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November sales, excluding auto and gas, rose 0.2%, below consensus estimates for a 0.4% increase. The control group in Tuesday’s release, which excludes several volatile categories and factors into the Gross Domestic Product reading for the quarter, increased by 0.4%, in line with estimates.

The report comes as investors continue to closely monitor the health of the US economy, and the Federal Reserve dials back its restrictive interest rate policy. To date, economic data has largely been better than expected, a welcome sign for investors as markets shift to accept the Fed may not slash interest rates as quickly as initially hoped.

Investors are awaiting an update on how the Federal Reserve is feeling about the trajectory of the US economy on Wednesday with the release of central bank’s latest Summary of Economic Projections and a press conference from Federal Reserve chair Jerome Powell.

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As of Tuesday morning, markets were pricing in a roughly 97% chance the Fed cuts interest rates by 25 basis points on Wednesday, per the CME FedWatch Tool.

Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.

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