We Thrifty Kings

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What's going on?

Data out on Wednesday showed US retail sales rose at their slowest in four months in November, as the countrys shoppers realize theres only so generous they can be this Christmas

What does this mean?

US retail sales were just 0.3% higher in November than they were the month before, falling short of the 0.8% investors were expecting. And while electronics and appliances sales dropped 4.6%, this wasnt just a matter of one player letting the side down: five of the 13 of retail categories sold less in November than October. Sure, that might be because Americans did their holiday shopping ahead of time in a bid to outmaneuver supply chain shortages. But a grimmer theory is that shoppers are being put off by soaring consumer prices, which might become even more pronounced early next year when more government support programs including the freeze on student loan payments grind to halt.

Why should I care?

The bigger picture: The Feds stepping up.
Consumer spending accounts for more than two-thirds of the US economy, which means this drop-off could have a big impact on the countrys economic growth. That might be why the Federal Reserve (the Fed) is finally calling time on inflation: the central bank announced on Wednesday that itll be winding down its bond-buying program twice as fast as it originally planned. That should push up the cost of borrowing, deter spending, and, ultimately, cool down rising prices.

For you personally: Time for change.
The Feds said it wont hike interest rates until its no longer buying any bonds, so Wednesdays announcement suggests this hike will happen sooner than expected too. And it could be the first of many: Fed officials are now hinting at as many as three rate rises next year, which could be a reason to rotate away from tech stocks which perform worse in high-interest environments and into those that are less affected, like consumer staples.

Originally posted as part of the Finimize daily email.

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