November retail sales are up 0.3% month-over-month — topping Wall Street expectations — according to US Census Bureau data. Consumers are continuing to spend despite inflation, with restaurants and hobby stores seeing some of the biggest month-over-month increases in spending.

Yahoo Finance Reporter Josh Schafer joins the Live show to break down the data, discussing the resiliency of American consumers and their disregard for inflationary trends.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

- Well, the consumer just keeps on going strong. US retail sales in November posting a surprise jump, up 0.3% where a dip was expected. Here with the sectors that saw the biggest gains and losses is Yahoo Finance's Josh Schafer. Still spending, Josh.

JOSH SCHAFER: Yeah, Rachelle. I mean, at this point, we really shouldn't be surprised when retail sales beats Wall Street's expectations. That's been the story for really most of 2023, and certainly through the summer and through Q3. But I want to hit some of the sectors where we saw the biggest gains and the biggest losses in the month of November.

So right now you're looking at the overall chart. You can see retail sales up 0.3% in the month of November, after that slight decline we saw in October. So we're not trending down. That was a big concern coming into this report. But always interesting to just take a look at what won and what didn't win, especially when we think about November, of course, holiday spending.

So some things that did win, you can see there, restaurants, food away from home at restaurants, rising 1.6%. Hobby stores, 1.3%. Hobby stores include sporting goods. E-commerce up 1%. Health stores and furniture also up about 1%.

But, of course, not everything can go up, right. We didn't have that big of a number. Gas stations were down 2.9%. Now, part of that is really because gas prices came down. So that's not necessarily people buying less gas.

Department stores down 2 and 1/2%. Miscellaneous stores down 2%, electronics down 1%, which is in that discretionary category. So that's always an interesting one to watch. Department stores down, though. Another one to highlight. A lot more people shopping online this year, it seems, from various different data points that we're looking at as far as holiday spending goes.

And Rachelle, just the last thing I'm thinking of just overall with this. Number one thing we really wanted to see-- you don't want to see too big of a number, right. That's when people start to get worried about inflation and we're growing too strong. But you did want to see a little bit of a rebound because we saw that negative print in October.

So economists of making sense of this print today to say, well, if you take negative from October-- slightly negative in October, slightly positive in November, we're sort of just tracking lower than Q3 and that's good when you think soft landing. Remember soft landing has a little bit of economic growth, or slowing down, baked into it.

So overall, the kind of print we've been talking about in terms of economic data in a positive in terms of the Fed.

- It's true. And then especially as we look at factoring in some holiday spending, is that holiday shopping season extends now through the middle of October. But, of course, consumers say they're tired of inflation but they keep on spending. Where is the disconnect?

JOSH SCHAFER: Yeah, Rachelle. I mean, it's been interesting to follow that throughout, really, the last several years now. But it seems like part of the disconnect is just what people say about inflation versus what they're willing to pay hasn't really added up. And I think that's led to some of the confusion we've had in the data over the last year.

When you look at prices being higher or people saying that they can't afford these prices or that they're getting sick of paying these prices. But then we've just seen the quote unquote resilient consumer throughout 2023.

So I think when you look at some of that survey data that you're referencing of people being tired of inflation, I think it just hasn't translated and it sort of gets us to the larger economic story of 2023 which is, why didn't we see a slowdown? Because people don't like inflation. No one wants to pay more.

But right now, Americans seem to be able to find a way to pay more. And that's what's keeping economic growth going, at least for now. Of course, some people still see that slowdown coming in '24, Rachelle. We'll have to see.

- It's true. And as they find those ways to pay, looking at those credit card delinquencies continuing to tick up. The rubber is going to hit the road at some point. Appreciate you. Our very own Josh Schafer.