Consumers cut back on spending in November, failing to keep up with even a low level of inflation as retail sales tank, according to data released Thursday by the Commerce Department.
Retail sales fell 0.6% in the month, exceeding the Dow Jones forecast of a 0.3% dip. The figure does not account for inflation as measured by the Labor Department’s consumer price index, which rose 0.1% in November, likewise falling short of expectations.
Stocks sank dramatically after a batch of mostly underwhelming economic data was announced Thursday morning. The Dow Jones Industrial Average was down roughly 500 points in early trade.
The pullback was prevalent across all categories. Furniture and home furnishings retailers were down 2.6%, construction materials and garden centers were down 2.5%, and motor vehicle and parts dealers were down 2.3%.
Despite falling gas prices, service station sales fell by only 0.1%.
Online sales also fell by 0.9%, while bars and restaurants went up by 0.9%. Additionally, food and beverage store sales also increased by 0.8%.
Retail sales climbed 6.5% year on year, compared to a 7.1% CPI inflation rate.
According to Capital Economics senior U.S. economist Andrew Hunter, “With weak global growth and the strong dollar compounding the domestic drag from higher interest rates, we suspect this weakness is a sign of things to come.”