Retail Sales Rise in November by Most in Four Months
Retail sales climbed in November by the most in four months as American consumers put to work some of the money saved from the cheapest gasoline since early 2009.
The 0.2% increase in November, less than forecast, followed a 0.1% gain in the previous month, Commerce Department figures showed Dec. 11. Excluding purchases of autos and gasoline, retail purchases climbed 0.5%, also the biggest advance since July.
A labor market that has put millions back to work this year and propelled disposable income also has given households a little more to spend, a development that should help retailers during the holidays. Faster wage growth would provide an even bigger boost for consumers and encourage broad-based spending beyond big-ticket items such as autos and appliances.
"Consumers started the holiday season on a pretty solid note,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh, who is among the most reliable forecasters of retail sales. "It’s a pretty solid across-the-board increase from electronics to apparel to restaurants to online buying.”
The median forecast of 80 economists in a Bloomberg survey called for a 0.3% increase in sales. Estimates ranged from a 0.3% decline to a 0.5% pickup. There were no revisions to September or October data.
Eight of 13 major categories showed increases last month. Those seeing an improvement in demand included Internet retailers, general merchandise stores, apparel shops and sporting-goods merchants. Restaurant sales climbed 0.7%, the most since April.
Receipts at gas stations weighed on the retail sales figures in November as the cost of a gallon of regular gasoline fell 6.7% last month, based on data from motoring group AAA. Receipts at filling stations dropped 0.8%. The retail sales data aren’t adjusted for changes in pricing.|
Sales also fell at automobile dealers last month. The 0.4% decrease, after a 0.3% decline, is at odds with industry data from Ward’s Automotive Group that showed sales of cars and light trucks in November exceeded an 18 million annualized rate for a record third straight month.
Based on the industry data, the appetite for new cars is fueled by an improving economy, along with carmakers using rebates and other offers to draw shoppers to their showrooms.
The gain in retail sales, excluding autos and gasoline, was larger than projected and followed a 0.3% improvement the month before, the Commerce Department report showed. Economists forecast a 0.4% November increase, according to the Bloomberg survey median.
“The trend in consumer spending is still pretty strong,” Jim O’Sullivan, chief U.S. economist at High Frequency Economics Ltd., said before the report. “It’s being helped by good wage income growth and the boost in spending power from declining gasoline prices.”
The figures used to calculate gross domestic product, which exclude categories such as food services, auto dealers, home-improvement stores and service stations, increased 0.6% in November after rising 0.2%.
Consumer spending has proceeded at a moderate pace, boosted primarily by payrolls that have climbed by 2.3 million this year. Still, households are proceeding cautiously and socking away much of their spare cash from cheaper gasoline.
The saving rate was 5.6% in October, the highest since 2012, separate Commerce Department data show. That may be related to wage growth that has yet to pick up significantly.
The Federal Reserve will use the Dec. 11 data to shape their views of the economy’s progress. Policymakers are projected to raise their benchmark interest rate at their meeting next week.
