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Retail sales — What to know in markets Friday

Heidi Chung

Investors will get a pulse on the health of the U.S. consumer Friday when the Census Bureau releases the retail sales data for November.

November’s data is crucial because it captures a substantial part of the holiday shopping season. Though retail sales are expected to have been solid during the month, some economists explained that there could be some pressure resulting from the later-than-normal Thanksgiving holiday. “We expect a modest 0.1% m-o-m increase in core (‘control’) retail sales in November,” Nomura wrote in a note Friday. “While consumer fundamentals remain solid, we expect transitory downward pressure due to a later-than-usual start to the holiday shopping season. A later Thanksgiving holiday this year resulted in Black Friday taking place six days later than in 2018.”

Nevertheless, the firm explained that any softness in November’s retail sales data means a sharp rebound in December.

Holiday shoppers look for deals during the Black Friday sales event at the Pentagon Centre shopping mall in Arlington, Virginia, U.S., November 29, 2019. REUTERS/Loren Elliott

Meanwhile, Societe Generale noted, “Demand from households has slowed modestly toward the end of 2019. Recent retail sales are up modestly but after adjusting for inflation, real retail sales are much flatter. Increasingly, the U.S. economy is reliant on the consumer. We should be concerned by the flattening of sales. Confidence and job trends remain favorable but neither offer much upside for consumer spending. Confidence and job gains may be peaking and at best suggest no downside. That could change if businesses begin scaling back on hiring plans.”

Economists polled by Bloomberg expect core retail sales rose 0.4% in November, up from 0.1% in October.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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