According to the National Association of Manufacturers’ (NAM) Monday Economic Report for this week, retail sales fell 0.6% in November. Excluding motor vehicles and gasoline sales, retail spending declined 0.2% in November, the first negative reading in 11 months. Yet, retail sales have increased 6.5% YoY, or 6.7% over the past 12 months with motor vehicles and gasoline sales excluded.

In November, the data were mixed. Retail sales increased for food services and drinking places (+0.9%), food and beverage stores (+0.8%), health and personal care stores (+0.7%) and miscellaneous store retailers (+0.5%). In contrast, spending declined at furniture and home furnishings stores (-2.6%), building material and garden supply stores (-2.5%), motor vehicles and parts dealers (-2.3%), electronics and appliance stores (-1.5%) and non-store retailers (-0.9%), among others.

The Federal Open Market Committee (FOMC) increased the target federal funds rate by 50 basis points to 4.50%. This move follows four consecutive 75-basis-point increases at its previous meetings, which represents some slowing in the pace of rate hikes. Moving forward, the Fed will likely further increase the federal funds rate by 50 or 75 basis points in total at its Jan. 31–Feb. 1 and March 21–22 meetings before hopefully hitting the pause button.

Federal Reserve participants expect real GDP growth of 0.5% in both 2022 and 2023, with next year’s growth down from a previous estimate of 1.2%. The unemployment rate is seen as rising from 3.7% in 2022 to 4.6% in 2023