American consumers are facing pressure from persistently high prices, and their spending power is showing signs of strain. Retail monitoring data jointly released by CNBC and the National Retail Federation shows that the month-on-month growth rate of total US retail sales in October hit its lowest level in nearly a year. Although retailers launched holiday promotions to boost sales, residents are becoming increasingly cautious with their spending, and signs of weak consumption are gradually emerging.

Retail data showed overall weakness, with promotional activities barely providing any support.

The exclusive data released Wednesday (November 11), after seasonal adjustment, showed that total U.S. retail sales reached $561.7 billion in October, up 0.2% month-over-month and 3.6% year-over-year. Core retail spending, excluding food service, rose 0.3% month-over-month to $454.2 billion, and increased 3.4% year-over-year. The month-over-month growth rate of total retail sales is the lowest since November 2025, directly reflecting rising prices eroding consumers' wallets and making them more discerning in their purchasing decisions. The National Retail Federation (NRF) stated that the surge in Halloween spending and early holiday promotions prevented a further decline in retail sales. NRF CEO Matthew Shay said that households are planning their spending carefully, waiting for promotions and discounts to make purchases and improve the efficiency of their funds; retailers are also continuing to offer various promotions and discounts to maintain the affordability of everyday items and holiday gifts. The data for these monitoring metrics is provided by AffinitySolutions. The sample has recently been expanded to include transaction records from approximately 120 million debit and credit cards, making it one of the most comprehensive sources of credit card spending data in the United States.

Significant divergence in industry consumption, with continued sluggish consumption in the real estate sector.

Of the 11 sub-sectors, 9 achieved positive year-on-year spending growth, with electronics and home appliances leading the way, seeing a 9.3% increase in consumption within a year. Driven by the AI boom, which boosted memory chip prices, tech companies raised prices on several products, including MacBooks and Xboxes, supporting consumption in this sector. In contrast, the home furnishings sector saw a 0.2% month-on-month decline and a 2.6% year-on-year decrease in furniture and home goods sales in October. This was mainly due to rising mortgage rates and a stagnant real estate market, which dragged down home furnishing consumption. Sporting goods, audio-visual products, and other leisure items saw a slight month-on-month increase in October, but still declined by 0.4% year-on-year, indicating overall weak demand.

With inflationary pressures remaining high, businesses' willingness to raise prices has increased significantly.

This retail sales data further confirms the impact of high inflation on American residents, whose consumption is the primary engine of US economic growth. The Bureau of Labor Statistics released CPI data on Tuesday, showing that the October CPI rose 0.4% month-on-month, higher than market expectations. On the same day, a survey by the National Federation of Independent Business also released a bearish signal, with a net 37% of businesses planning to raise product prices in the next three months, the highest percentage since July 2022, when the US economy was suffering from the energy shock caused by the Russia-Ukraine conflict. Prices and the cost of living were also key issues of concern to voters in last week's midterm elections, and the election results brought about a power shift in the US political landscape rarely seen in recent years, with public pressure regarding inflation continuing.

Conclusion

The cooling of US consumption is a result of the combined effects of high prices and high interest rates, with significant divergence between industries. On one hand, consumer electronics are booming, driven by AI, while on the other hand, consumption related to the real estate sector continues to shrink. Coupled with a resurgence in corporate willingness to raise prices and persistent inflationary stickiness, the ability of household consumption to continue supporting the US economy remains highly uncertain and will continue to influence the Federal Reserve's future monetary policy decisions.