Car sales rebounding and holiday shopping frenzy resonating - US November retail sales growth hits new high since July last year.

Driven by a rebound in car sales and strong growth during the holiday shopping season, retail sales in the United States exceeded expectations in November. Data released by the US Department of Commerce on Wednesday showed that retail sales in November grew by 0.6% from the previous month, reaching a new high since July of last year, surpassing market expectations of a 0.4% increase; retail sales in October were revised down to -0.1%. In addition, core retail sales, which exclude car sales, also rose by 0.5% from the previous month, better than the market's expectation of 0.4%. It is reported that out of 13 categories, 10 categories saw growth, including sporting goods and hobby stores, building material retailers, and clothing stores. Car sales rebounded in November, after being suppressed the previous month due to the expiration of federal tax incentives for electric cars. Growth in gas station revenues also contributed to the overall increase. The only service industry category in the retail report, spending at restaurants and bars, increased by 0.6% after experiencing a decline in October. The holiday shopping season usually picks up in November, with retailers offering promotions and discounts not only on Black Friday but also in the days leading up to it. Despite consumer concerns about affordability and job prospects, they took advantage of the promotional opportunities during the shopping season. In addition, affluent Americans continued to support overall consumer spending. According to Adobe, consumer spending online during the holiday season from November 1st to December 31st reached a historical high, as consumers took advantage of various promotions and "buy now, pay later" options. Furthermore, "control group sales" (used by the government in calculating goods expenditures in GDP) increased by 0.4% in November, down slightly from the 0.6% growth the previous month. This measure excludes food services, car dealerships, building materials stores, and gas stations, indicating a positive economic growth outlook for the end of the year. Before the report was released, the Atlanta Federal Reserve's GDPNow model predicted that household spending would contribute about two percentage points to fourth-quarter economic growth, slightly lower than the contribution in the previous quarter. Federal employees may receive additional wage boosts as they make up for wages lost due to the government shutdown. Since retail data is not adjusted for inflation, the growth in consumer spending may reflect price increases rather than increased demand. Weak consumer spending during the holiday season may also reflect significant discounts. These data mainly reflect the purchase of goods, which account for about one-third of total household expenditures. On the price front, some economists believe that the inflation data released on Tuesday showed that the impact of tariffs on consumer prices has peaked. This could benefit future goods spending. Investors and economists closely monitor the retail sales data, often referred to as "scary data," as consumer spending is one of the biggest drivers of economic growth in the US, and can easily "determine the future direction of monetary policy." If consumer spending is too strong, the Federal Reserve may believe that there is no need to cut interest rates to support the economy. Conversely, weak consumer spending may indicate the need to lower interest rates to stimulate demand. The better-than-expected US retail sales data for November released on Wednesday may reinforce the narrative of a "soft landing" for the US economy and lead traders to reduce their bets on a rate cut by the Federal Reserve.