Consumers are continuing to propel the U.S. economy forward

Monthly report on the consumer economic landscape from U.S. Principal Economist Michael Brown and U.S. Assoc. Economist Travis Clark.

December 24, 2019 – Retail sales (excluding auto sales) growth remained modest at 3.0 percent in November, up slightly from October’s 2.8 percent year-over-year (YoY) increase. Retail sales increased in eight of 13 industries last month. The control group^* within retail sales—which feeds into the GDP calculation—rose just 0.1 percent month-over-month (MoM) in November, suggesting that real consumer spending is showing signs of moderating in Q4.

Stronger wage and salary growth for the month helped support growth in nominal personal disposable income, rising 4.1 percent YoY. This was a slightly slower pace than in October. The saving rate edged a bit lower to 7.8 percent, down from September’s 8.1 percent reading, suggesting a bit less caution among consumers.

November’s data on the consumer sector continued to point towards positive consumer spending momentum to end the year. Strong job and wage growth along with solid retail sales indicate that consumers remain optimistic enough to propel the economy forward through additional spending. — Michael Brown, Principal U.S. Economist at Visa

Job growth rebounded stronger than expected in November, which helped to keep consumer confidence elevated for the month. Modest inflation rates are also helping to support consumer spending growth. — Travis Clark, U.S. Assoc. Economist at Visa

Other highlights of this report:

November job growth surged higher, far exceeding expectations. The U.S. economy added 266,000 jobs in November, which was the second largest monthly increase of 2019.
November YoY price growth was the strongest reading of 2019, increasing 30 basis points. This was largely due to rising energy prices and rental rates.
Consumer confidence dropped by just over half a point in November, remaining relatively stable for another month. Consumers’ confidence in the present situation fell in November, while future expectations actually increased for the first time since July.

Download complete report (PDF), including key monthly consumer indicatory charts

Monthly employment growth (Monthly change, in thousands)

Bar chart showing U.S. monthly employment growth in Nov 2019.

Sources: Visa Business and Economic Insights, Conference Board/Haver Analytics

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