Retail Sales Rebound as Jobless Claims Decline in U.S.

Retail sales rebounded in November and applications for jobless benefits fell more than forecast last week, pointing to strength in U.S. consumer demand as the holiday-shopping season gets under way.

Purchases climbed 0.3 percent following an October decrease of 0.3 percent, Commerce Department figures showed today in Washington. Unemployment claims fell by 29,000 to a nine-week low of 343,000, the Labor Department said. Economists forecast 369,000 first-time claims, according to the median estimate in a Bloomberg survey.

“We’re off to a fairly strong holiday-spending season,” said Millan Mulraine, senior U.S. strategist for TD Securities in New York, who correctly projected the November sales gain. “Consumer spending could offset some of the weakness” in other areas such as corporate investment, he said.

Americans snapped up clothes and electronics at stores and online last month, while vehicle sales jumped as some Northeast residents sought replacements for autos damaged by superstorm Sandy. Another report showed consumer confidence cooled, underscoring the effects of limited job opportunities that prompted the Federal Reserve yesterday to boost record monetary stimulus.

Stocks fell, snapping a six-day advance in the Standard & Poor’s 500 Index, amid a standoff in federal budget negotiations. The S&P 500 dropped 0.6 percent to 1,419.45 at the close in New York.

Ten of 13 major categories in the retail sales report showed November gains, led by a 1.4 percent increase at auto dealers, a 2.5 percent jump at electronics outlets and a 0.9 percent gain at clothing stores.

Limited Brands

Limited Brands Inc., the operator of the Victoria’s Secret lingerie chain, reported comparable sales rose 5 percent in the month, topping projections for a 3.4 percent gain. December sales may increase in the “low-single digits,” the company said on a Nov. 29 call. Columbus, Ohio-based Limited Brands said Sandy reduced its November comparable-store sales growth by as much as 2 percentage points.

At the same time, consumer confidence stagnated last week, showing a lack of improvement since October as lawmakers continue to search for common ground on taxes and government spending in 2013.

The Bloomberg Consumer Comfort Index slipped to minus 34.5 in the period ended Dec. 9, the lowest level in six weeks, from minus 33.8. The reading was the 12th straight above minus 40, the level associated with recessions and their aftermath. The decrease was within the margin of error of 3 percentage points.

Gasoline Prices

Retail sales were projected to climb 0.5 percent in November, according to the median forecast of 81 economists surveyed by Bloomberg. Cheaper gasoline led to the largest decline in service-station receipts in four years and restrained the value of all purchases.

Energy costs fell the most since March 2009, contributing to a larger-than-forecast drop in wholesale prices last month, another Labor Department report showed. The producer price index decreased 0.8 percent, the most since May, after falling 0.2 percent in October. The median forecast in a Bloomberg survey called for a 0.5 percent decline. The core measure, which excludes volatile food and energy, increased 0.1 percent after falling 0.2 percent.

Cars and light trucks sold in November at a 15.5 million annual rate, the fastest pace since February 2008 and up from 14.2 million in October when Sandy kept East Coast shoppers away during auto dealers’ busiest time of the month, data from Ward’s Automotive Group showed. Ford Motor Co. (F) deliveries of cars and light trucks climbed 6.4 percent and General Motors Co. (GM) sales gained 3.4 percent, the companies said Dec. 3.

General Merchandise

One of the weaker categories last month was general merchandise stores, where sales dropped 0.9 percent.

Sales at Macy’s Inc. (M), the second-biggest U.S. department- store company, fell 0.7 percent, while the average projection from analysts surveyed by Retail Metrics called for an increase, industry figures earlier this month showed. Kohl’s Corp. (KSS) of Menomonee Falls, Wisconsin, said same-store sales dropped 5.6 percent, also in contrast to estimates for a gain.

Filling-station sales fell 4 percent, the biggest decrease since December 2008, as cheaper gasoline held back receipts. The Commerce Department’s retail sales data aren’t adjusted for prices. The average cost of a gallon of gasoline was $3.44 in November, down from $3.70 in October, according to AAA, the largest U.S. auto organization.

Non-store retailers such as online merchant Amazon.com Inc. showed a 3 percent jump in sales, the most since October 2011.

Building Materials

Sales at building-material stores climbed 1.6 percent, in part reflecting improved demand on rebuilding efforts along the East Coast following superstorm Sandy.

The Commerce Department said it wasn’t able to quantify the effects of Sandy. The agency said respondents reported both positive and negative effects from the storm.

Sales excluding autos, gasoline and building materials, which are the figures used to calculate gross domestic product, climbed 0.5 percent in November after being little changed in the previous month.

Household spending is unlikely to accelerate without faster hiring. Payrolls rose by 146,000 in November following a revised 138,000 increase in October that was less than initially estimated, figures showed last week.

Higher Taxes

Americans also face the possibility of more than $600 billion in tax increases and government spending cuts next year unless lawmakers agree on a budget before the end of the month.

Fed policy makers yesterday said the central bank will buy $45 billion a month of Treasury securities starting in January, expanding its asset-purchase program, and linked the outlook for its main interest rate to unemployment and inflation.

“The committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor-market conditions,” they said in the statement.

To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net;

To contact the reporter on this story: Alexander Kowalski in Washington at akowalski13@bloomberg.net

1:15:47

Dec. 12 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke speaks about the central bank's monetary policy, the U.S. economy and fiscal policy. He speaks at a news conference in Washington after a meeting of the Federal Open Market Committee. The Fed for the first time linked the outlook for its main interest rate to unemployment and inflation, and said it will expand its asset purchase program by buying $45 billion a month of Treasury securities starting in January to spur the economy. (Source: Bloomberg)

1:58

Dec. 13 (Bloomberg) -- First-time claims for unemployment insurance payments in the U.S. fell by 29,000 to 343,000 in the week ended Dec. 8, Labor Department figures showed today. The producer price index fell 0.8 percent in November, the Labor Department also reported. Retail sales rose in November by 0.3 as demand for automobiles rebounded and holiday shoppers snapped up electronics and clothes, Commerce Department figures showed. Betty Liu and Michael McKee report on Bloomberg Television's "In the Loop."