Retail Sales Growth Holds Steady in November

US consumer spending remains resilient enough to support robust fourth-quarter growth despite choppier monthly retail-sales data and softer labor-market trends.

• Headline retail sales rose 0.6% in November, while the October estimate was revised down by 0.2%; control sales increased 0.4% but October was revised down by 0.4%.
• Control sales have maintained a steady upward trend in both nominal and real terms for three years, and consumer spending has been the main support of the five-year US expansion.
• Western Asset estimates real control-sales growth at a 4.2% annualized rate in 4Q25, compared with 3.2% in 3Q25, using interpolated October prices because no CPI data were produced during the government shutdown.
• The analysis also assumes that retail-price inflation for control-sales categories has matched the relevant CPI since retail price data were cancelled in summer 2024.
• A sharp decline in the October trade deficit supports the Atlanta Federal Reserve GDPNow estimate of 5.3% annualized GDP growth in 4Q25, although official consumption, trade and construction data were still incomplete.

Takeaway: The available evidence points to healthy consumer demand and good or very good US growth at year-end, but the estimate remains preliminary and depends on forthcoming consumption, trade and construction data.