Amazon, Target, and other retailers posted a small 0.3% increase in sales in November, but high inflation suggests that consumers bought fewer goods and services than expected at the beginning of the holiday shopping season.
Economists polled by The Wall Street Journal had predicted an increase of 0.8%.
The increase in sales was outstripped by the rising cost of living. In November, the consumer price index jumped 0.8% to push the yearly inflation rate to a 39 year high of 6.8%. Retail sales of inflation appeared to have declined. Americans have a lot to spend because of the stimulus money, rising wages and high savings amassed during the epidemic. The big danger is that high inflation and price increases become embedded in the economy. That could cause the Federal Reserve to raise interest rates, increase business costs and discourage consumers from buying as many goods and services. The Fed still believes that inflation will cool off in 2022, but the central bank is worried that it won't phase out the stimulus sooner than planned for the economy. Market reaction: The Dow Jones Industrial Average DJIA and S&P 500 SPX were set to open slightly lower on Wednesday.