Consumer Spending Surges in November as Wholesale Price Growth Misses Estimates

2026-01-14 economy

Washington D.C., Wednesday, 14 January 2026.
Retail sales unexpectedly jumped 0.6%, significantly outpacing the softer 0.2% rise in wholesale prices, signaling robust economic resilience despite delayed government data.

Consumer Resilience Outpaces Forecasts

The latest figures from the Commerce Department indicate a consumer base that remains surprisingly buoyant. Retail sales climbed 0.6% in November, surpassing the 0.4% increase economists had anticipated [1]. Even when stripping out the volatile automotive sector, spending rose 0.5%, beating the consensus estimate of 0.3% [1]. This uptick was not limited to a single industry; gains were broad-based, with motor vehicle dealers, building material centers, gas stations, and sporting goods stores all recording increases of more than 1% [1]. On an annual basis, retail sales have grown 3.3%, a figure that notably outpaces the 2.7% rise in the Consumer Price Index (CPI) for the same period, suggesting that consumer demand is retaining its strength in real terms [1][3].

Energy Costs Mask Softer Core Inflation

While consumption heated up, inflationary pressures at the wholesale level appeared to cool more than expected. The Producer Price Index (PPI) rose just 0.2% for the month, falling short of the 0.3% forecast [1][2]. More significantly, core PPI—which excludes food and energy—was flat in November, defying expectations for a 0.2% gain [1][6]. This stagnation in core prices signals a potential easing of inflationary momentum within the supply chain, although the headline number was propped up by a significant spike in energy costs [2][6]. Specifically, a 4.6% jump in energy prices accounted for over 80% of the 0.9% increase seen in goods prices, while services prices remained completely flat [1][3].

Delayed Data and Policy Implications

It is crucial to view these figures through the lens of the recent 43-day government shutdown, which has caused significant delays in the release of this economic data [3][4]. Despite the softer monthly reading, the year-over-year trend shows headline PPI up 3.0%, which remains comfortably above the Federal Reserve’s 2% target [1][8]. Furthermore, core PPI excluding trade services registered a 3.5% annual gain, the largest 12-month increase since March 2025 [1]. These mixed signals arrive as the Federal Reserve prepares for its meeting on January 27-28, where policymakers are widely expected to hold the benchmark interest rate steady in the 3.50% to 3.75% range [3].

Market Reaction and Political Context

Financial markets reacted with restraint to the mixed data release. U.S. Treasury yields were broadly flat on Wednesday morning, with the 10-year yield hovering around 4.163% as investors digested the implications of resilient spending against moderating wholesale prices [4]. The economic narrative is currently unfolding alongside heightened political tension; Federal Reserve Chair Jerome Powell recently revealed he is under criminal investigation regarding a $2.5 billion renovation project, a development that has drawn defense from global central bankers but adds a layer of complexity to the Fed’s current operating environment [4]. Despite these headwinds, the data suggests the economy is managing to sustain growth while price pressures in the manufacturing sector begin to stabilize [2].

Sources

Wholesale Inflation Retail Sales