From X today:
Nov retail sales came in hot at +0.6% M/M and +3.3% Y/Y, beating expectations and above inflation, also a strong rebound from the lackluster numbers in Sep and Oct, while preliminary Dec data points to yet another month of strong consumer spending…
That’s from EJ Antoni, Chief Economist for the Heritage Foundation. Here’s some perspective:
Figure 1: Nominal retail sales (blue), and real retail sales (tan), both s.a., in logs 2025M01=0. Real calculation uses CPI-ex shelter for deflation. Source: Census, BLS and author’s calculations.
While retail sales growth exceed consensus, same-store sales matched expectations, as reported by Bloomberg.
Moreover, while November retail sales grew faster than expected, there being no reported November inflation rate, it’s hard to figure out if it’s true that it outpaced inflation, as asserted (November growth did exceed December CPI-all inflation, m/m).
Using the CPI-ex shelter deflated CPI, retail sales are, despite the recovery, only at August levels.
Using CPI-ex shelter deflated retail sales, here’s a picture of the business cycle alternative indicators (NBER BCDC indicators here).
Figure 2: Implied Nonfarm Payroll early benchmark (NFP) (bold blue), civilian employment adjusted to NFP concept, smoothed population controls and 3 month centered moving average (bold orange), manufacturing production (red), personal income excluding current transfers in Ch.2017$ (bold green), real retail sales (black), freight services index (brown), and coincident index in Ch.2017$ (pink), GDO (blue bars), all log normalized to 2021M11=0. Source: Philadelphia Fed [1], Philadelphia Fed [2]Federal Reserve, BTS via FRED, BEA 2025Q3 initial release, and author’s calculations.
Taken overall, there seems to have been an overall flattening of some indicators in the last three months.
