U.S. retail sales showed a bit more strength in November, Commerce Department data released on December 11th revealed, pointing to a continued moderate pace of economic growth in coming months.
Sales at U.S. retail stores rose 0.2% in November, in line with expectations. This continues a string of little or no gains in sales since July. But total sales were held down by lower prices for gasoline and weaker demand for autos. The figures are seasonally adjusted but are not adjusted for inflation. Excluding a 0.4% fall in sales of autos, sales rose 0.4%, the fastest pace in four months. Economists had expected sales excluding autos to rise 0.2%.
“Despite a weak-ish headline, retail spending in November suggests a firm pace of consumption in fourth quarter,” Bricklin Dwyer, economist at BNP Paribas.
Still, sales are likely to slow from the pace in the third quarter when adjusted for inflation. Jennifer Lee, economist at BMO Capital Markets, said real consumer spending likely rose an annualized 2.25% in the fourth quarter, down from a 3% pace in the third quarter and 3.6% in the second quarter. Excluding the 0.8% fall in sales at gasoline station in November, sales rose 0.3%. Excluding both autos and gas, sales rose 0.5%. The so-called control group, excluding gas, autos and building materials, grew by a very encouraging 0.6%.
Sales in October were unrevised at a 0.1% gain. In the past year, retail sales are up 1.4%. The report adds to the perception that the U.S. economy could stay on a moderate growth track in the next year. The Fed thinks the economy is strong enough to handle an interest-rate increase next week, and this set of data is unlikely to change their minds.
The details of the report continued to show that while some parts of the retail business are doing very well, namely Internet sellers, old-style retailers such as department stores are having a much tougher time. Sales at non-store retailers, such as catalogs and online stores, rose 0.6% in November while department-store sales were flat.
Online sales have climbed 7.3% in the past 12 months, compared to a 2.4% decline for department stores.
Other pockets of weakness were sales at furniture stores, which fell 0.3% and sales at building materials stores, which fell 0.3%.
Sales at drug stores and personal-care stores were flat.
The remainder of the sectors showed gains, with food and beverage store sales rising 0.7% and sales at electronics stores up 0.6%. Sales at clothing stores rose 0.8%. Sales at sporting goods, book and hobby stores rose 0.8 %.
People continued to eat out; sales at restaurants and bars rose 0.7%.