Retail Sales in U.S. Probably Rose as Auto Demand Rebounded
Retail sales in the U.S. probably climbed in November on rebounding demand for automobiles, economists said before a report today.
The projected 0.5 percent gain would follow a 0.3 percent drop in October, according to the median forecast of 81 economists surveyed by Bloomberg. Other reports may show wholesale costs and jobless claims fell.
Car sales jumped last month to a four-year high, in part because Americans in superstorm Sandy’s path replaced damaged vehicles. Federal Reserve policy makers yesterday expanded stimulus in a bid to reduce unemployment and spur the economy as chains such as Macy’s Inc. (M) cut prices to lure customers increasingly concerned about looming tax increases and government cutbacks.
“Consumer spending is nothing to write home about, but it’s growing,” said Sam Coffin, an economist at UBS Securities LLC in Stamford, Connecticut. “The labor market has improved, though not quite convincingly. The holiday season will be similar to last year’s, with decent sales growth.”
The Commerce Department’s figures are due at 8:30 a.m. in Washington. Economists’ estimates ranged from increases of 0.1 percent to 2 percent.
Also at 8:30 a.m., Labor Department data may show cheaper fuel costs pushed the producer price index down by 0.5 percent in November after a 0.2 percent drop the prior month, according to the Bloomberg survey median. Another Labor Department report may show the number of Americans applying for jobless benefits fell to 368,000 last week from 370,000, economists predicted.
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 dealers’ busiest time of the month, according to Ward’s Automotive Group. Ford Motor Co. (F) deliveries of cars and light trucks climbed 6.4 percent and General Motors Co. (GM) gained 3.4 percent, the companies said Dec. 3.
Other retailers probably had less success in bouncing back from early weakness related to Sandy. Retail sales excluding autos probably were little changed in November for a second straight month, according to the Bloomberg survey median.
Same-store sales for the more than 20 companies tracked by Swampscott, Massachusetts-based Retail Metrics Inc. rose 1.6 percent, excluding drugstores, trailing the estimate for a 3.5 percent gain, the firm said Nov. 29. That followed a 5 percent rise in October.
Sales at Macy’s, 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. Kohl’s Corp. (KSS) of Menomonee Falls, Wisconsin, said same-store sales fell 5.6 percent, in contrast to estimates for a gain.
Retail shares reflect the concern over holiday sales. The Standard & Poor’s Supercomposite Retailing Index, which includes Macy’s and Target Corp., has dropped 3 percent since reaching a record high on Nov. 28. The S&P 500 Index has climbed 1.3 percent during the same period.
Building-material outlets may be one area that saw improved demand last month on recovery efforts along the East Coast following Sandy.
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.
Americans also face the possibility of more than $600 billion in tax increases and government spending cuts next year unless lawmakers act. Consumer sentiment fell more than forecast in December, reaching a four-month low, according to a report from Thomson Reuters/University of Michigan.
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.
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