Retail Sales Climb in November by Most in Eight Months
Retail sales in the U.S. rose in November by the most in eight months as shoppers benefited from an improving job market and cheaper fuel.
The 0.7% gain in purchases matched the highest estimate of economists surveyed by Bloomberg News and followed a 0.5% advance in October that was larger than previously reported, Commerce Department figures showed in Washington. Demand improved in 11 of 13 major store categories.
A surge in hiring and the lowest gasoline prices in four years are giving households the wherewithal to sustain spending, which accounts for almost 70% of the economy. Rising confidence also has put Americans in the mood to shop during the holiday season, helping retailers such as Costco Wholesale Corp. and Gap Inc. beat analyst sales estimates.
“Consumers are in good shape,” Guy Berger, a U.S. economist at RBS Securities Inc. in Stamford, Connecticut, said before the report. He is among the top retail-sales forecasters in the past two years, according to data compiled by Bloomberg. “Employment is growing at a pretty brisk pace. Fuel prices plummeting means people have more to spend.”
Last month’s sales gain was the biggest since a 1.5% advance in March. The increases at building materials, clothing and department stores were the biggest since April.
The median forecast of 87 economists surveyed by Bloomberg called for a 0.4% advance. Estimates ranged from little changed to an increase of 0.7%. Retail sales for October were previously reported as a gain of 0.3%.
The Commerce Department’s figures showed sales climbed 1.7 % at automobile dealers after a 0.8 % increase the prior month.
Industry figures, the ones used to calculate economic growth, showed sales of cars and light trucks rose to a 17.1 million annualized rate in November from 16.4 million the prior month, according to data from Ward’s Automotive Group. In August, the rate was 17.5 million, the most since January 2006.
“Households are reaping significant disposable income gains each week at current gas prices,” Emily Kolinski Morris, chief economist of Dearborn, Michigan-based Ford Motor Co., said on a Dec. 2 sales call.
Retail sales excluding autos also increased 0.5%, the report showed. They were projected to rise 0.1%, according to the Bloomberg survey median.
The only two retail categories showing declines last month were service stations and miscellaneous retailers.
Gasoline station sales dropped 0.8% as lower gasoline costs depressed receipts. The Commerce Department’s data aren’t adjusted for prices.
Lower fuel prices are freeing up money for consumers to spend elsewhere. Regular gasoline at the pump sold at an average $2.62 a gallon as of Dec. 10, down more than $1 from this year’s high in April, according to AAA, the biggest U.S. auto group.
Excluding autos, gasoline and building materials, which render the figures used to calculate gross domestic product, sales climbed 0.6 %, the most since June, after a 0.5 % increase the previous month.
