Tuesday’s release of delayed economic data showed a U.S. consumer backdrop that is weakening at the margins even as headline growth remains solid. September retail sales rose just 0.2% versus expectations for 0.3% to 0.4%, and “control group” sales that feed GDP actually fell 0.1%, according to Reuters’ breakdown of the report. Once September’s 0.3% CPI increase is factored in, real retail spending edged down, signaling consumers entered Q4 on softer footing.
At the same time, the Conference Board’s Consumer Confidence Index dropped to 88.7 in November, its lowest since April, with both current conditions and expectations deteriorating. Surveys from the Associated Press and CNBC highlight that concerns about jobs, persistent inflation, tariffs, and the recently ended 43-day government shutdown are all weighing on sentiment across income and political groups. Yet high-income households are still spending and supporting aggregate consumption, while lower- and middle-income consumers feel more squeezed, creating what economists describe as a K-shaped pattern.
The shutdown has also distorted the data flow. Agencies missed key October readings and will publish only partial CPI and no standalone October jobs report, folding those figures into November’s release instead. That leaves policymakers and investors navigating with backward-looking indicators from September and survey data from just after the shutdown, increasing the odds of misreading momentum as the crucial holiday spending season ramps up.
