The American consumer—the engine that's kept the U.S. economy humming despite high interest rates and elevated prices—may finally be tapping the brakes. November retail sales came in essentially flat, with core sales (excluding autos, gas, and restaurants) down 0.04% month-over-month.

It's not a collapse, but it's a notable deceleration from the robust spending that defined much of 2024 and early 2025.

The Numbers

Overall retail sales, excluding car dealerships and petrol stations, edged up just 0.12% from October after seasonal adjustment. Year-over-year comparisons remain healthy—sales are up 4.53% from November 2024—but the monthly trend suggests momentum is fading.

For the first 11 months of 2025, total sales are up 5.06% year-over-year, while core sales have risen 5.22%. Those are solid numbers, but they mask a second-half slowdown that has economists watching closely.

Winners and Losers

The category breakdown reveals a mixed picture:

  • Digital products (electronic books, games): Down 0.37% monthly but up 14.81% yearly
  • Sporting goods, hobby, music, bookstores: Up 0.28% monthly, 8.96% yearly
  • Clothing and accessories: Down 0.04% monthly, up 8.16% yearly
  • Grocery and beverage: Up 0.74% monthly, 3.89% yearly
  • Building and garden supplies: Down 1.74% monthly, down 9.38% yearly

The weakness in building and garden supplies reflects the ongoing housing market slowdown—when people aren't buying homes, they're not renovating them either.

The Cyber Monday Effect

Some of November's weakness may be technical. Thanksgiving fell late this year, pushing Cyber Monday into December. The National Retail Federation noted that "shoppers looking for online deals may have held back a bit until Cyber Monday," potentially shifting spending into the following month.

We'll get a clearer picture when December data arrives—but even accounting for calendar effects, the trend is softer than earlier in the year.

Holiday Season Outlook

The NRF still expects holiday-period sales (November 1 through December 31) to rise between 3.7% and 4.2% year-over-year, pushing total spending slightly above $1 trillion for the first time ever. But that forecast may prove optimistic if November's weakness carries into December.

Fed Implications

The softer retail data adds to evidence of economic cooling that could give the Fed cover to continue cutting rates. Consumer spending represents roughly 70% of U.S. GDP—when consumers pull back, the economy feels it quickly.

Combined with Wednesday's weak jobs report, the retail figures paint a picture of an economy that's decelerating, though not yet contracting.

The Bottom Line

November's flat retail sales are a warning sign, not an emergency. The American consumer isn't tapped out—but after years of resilient spending despite inflation and high rates, fatigue is setting in. For retailers and consumer-facing companies, 2026 may prove more challenging than the robust growth of recent years. Adjust expectations accordingly.