U.S. Retail Sales Beat Expectations, Signaling Resilient Consumer Demand

U.S. retail sales grew more than expected in November, rebounding from a contraction in the previous month and pointing to continued resilience in consumer spending heading into the final stretch of 2025.

Retail sales rose 0.6% on a month-on-month basis, exceeding expectations for a 0.5% increase, according to data released by the U.S. Census Bureau on Wednesday. October’s reading was revised lower to show a 0.1% contraction, making November’s rebound more notable.

Consumer spending remains the backbone of the U.S. economy, typically accounting for nearly two-thirds of total output. The stronger-than-anticipated increase suggests households continued to spend despite persistent inflation pressures and higher borrowing costs.

Economists have been closely watching how rising living costs are shaping spending behavior, particularly among lower- and middle-income households. While higher-income consumers and large corporations continue to drive a disproportionate share of economic activity, concerns persist that weaker segments of the population are becoming more constrained.

Some analysts have described the current environment as a “K-shaped” economy, where wealthier households maintain robust spending power while others face mounting pressure from elevated prices and tighter financial conditions.

Still, the November data indicate that overall demand remains intact, offering reassurance that consumer momentum carried into the final month of the year. This resilience could provide a buffer for growth even as the Federal Reserve maintains a cautious stance on interest rates and policymakers weigh the balance between inflation control and economic support.