- Purchases excluding cars and gas jumped by most since July
- `Pretty solid' start to holiday sales season, economist says
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 percent increase in November, less than forecast, followed a 0.1 percent gain in the previous month, Commerce Department figures showed Friday. Excluding purchases of autos and gasoline, retail purchases climbed 0.5 percent, also the biggest advance since July.
A labor market that’s put millions back to work this year and propelled disposable income has also 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 best 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 percent increase in sales. Estimates ranged from a 0.3 percent decline to a 0.5 percent pickup. While October data were unrevised, September purchases were revised to a 0.1 percent decrease.
Compared with the same time last year, retail sales in November were up 1.4 percent, the data show.
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 percent, 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 percent last month, based on data from motoring group AAA. Receipts at filling stations dropped 0.8 percent. The retail sales data aren’t adjusted for changes in pricing.
Sales also fell at automobile dealers last month. The 0.4 percent decrease, after a 0.3 percent 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 car makers using rebates and other offers to draw shoppers to their showrooms and away from rivals.
The gain in retail sales excluding autos and gasoline was larger than projected and followed a 0.3 percent improvement the month before, the Commerce Department report showed. Economists forecast a 0.4 percent 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 percent in November after rising 0.2 percent.
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 percent 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 Friday’s data to shape their views of the economy’s progress. Policy makers are projected to raise their benchmark interest rate at their meeting next week.