WASHINGTON – Holiday shoppers are off to a solid but unspectacular start as retail sales registered a modest gain in November.
The Commerce Department said Friday that retail sales rose a seasonally adjusted 0.2 per cent to $448 billion last month. This marks an improvement after months of lacklustre spending as cheaper gasoline depressed overall sales volumes. Retail spending improved a mere 0.1 per cent in October after a 0.1 per cent drop in September.
But in November, shoppers upped their spending at clothiers, sporting goods stores and electronics outlets. Spending at online retailers such as Amazon advanced a healthy 0.6 per cent. General merchandise stores also improved, but in a bleak sign for chains such as Macy’s sales at department stores were flat.
“Despite a weak-ish headline, retail spending in November suggests a firm pace of consumption,” said Bricklin Dwyer, a senior economist at the bank BNP Paribas.
The report should provide some relief after evidence of tepid shopping during Black Friday — the day after Thanksgiving when consumers often splurge — and provide a better sense about their confidence in the broader economy. Initial figures indicated that many consumers stayed at home, potentially choosing to browse for holiday gifts online instead of wading through crowds at stores.
The National Retail Federation estimated that spending averaged $299.60 per person over Thanksgiving weekend. That was down from $381 last year. But the trade association says the figures are not comparable due to methodology changes.
But the retail sales report confirms that consumers are shifting away from malls and shopping plazas. Online sales advanced 7.3 per cent from a year ago. People are also more eager to eat out, with expenditures at restaurants increasing 0.7 per cent in November and 6.5 per cent over the past 12 months. Americans have stepped up their purchases of cars this year, although sales at auto dealers slipped 0.6 per cent last month.
The gains at electronics stores “presumably reflects decent Black Friday and Cyber Monday sales,” while the increased buying at clothiers might be because people are buying winter gear after an unseasonably warm October, said Steve Murphy, U.S. economist at Capital Economics.
Lower gas prices have restrained retail sales growth. Purchases at gas stations fell 0.8 per cent in November and have tumbled 19.9 per cent this year. Prices at the pump nationwide are averaging $2.01 a gallon, down 24 per cent from a year ago, according to AAA.
Excluding gas stations, retail sales have advanced 3.6 per cent this year. That compares to 1.4 per cent when including gas stations in retail sales.
The average household has an additional $660 to spend this year because of cheaper gas, according to the government. Still, it’s unclear whether cheaper gas has fueled more consumer confidence. Many Americans appear to be pocketing the savings.
Total consumer spending — which includes services — rose just 0.1 per cent in October, according to the government. But the savings rate was 5.6 per cent of after-tax income, the highest monthly savings level in nearly three years.
Economists watch the retail sales report closely because it provides the first indication each month of the willingness of Americans to spend. Consumer spending drives 70 per cent of the economy. Yet retail sales account for only about one-third of spending, with services such as haircuts and Internet access making up the other two-thirds.
This story has been corrected to that retail sales fell in September, instead of being unchanged.