Retail sales in the U.S. increased in November by the most in five months, according to the U.S. Commerce Department.
The 0.7% gain from the month before comes as figures for October were upwardly revised from an earlier reported 0.4% jump to a 0.6% increase. Year-over-year retail sales are up 4.7%.
The hike was broad based, but was helped by a 1.8% surge in new auto sales. When auto sales are removed, retail sales for November increased 0.4%. Other sectors seeing big gains are sales of furniture, moving up 1.2% and sales of electronics and appliances, picking up 1.1%. Online and catalog sales posted its biggest hike in nearly a year and a half, adding 2.2%.
The November report includes the all important “Black Friday” shopping day after Thanksgiving, but not “Cyber Monday” on Dec. 2.
“A better-than-expected November retail sales report, in part because so many were bracing for modest disappointment which lowered the bar of expectations,” said Lindsey Piegza, chief economist for the investment firm Sterne Agee. “We continue to see consumers dramatically shift the goods in their basket from month to month, rather than simultaneous strength across all categories. Last month it was apparel, electronics and miscellaneous sales, this month its building materials and non-store retailer purchases.”
She notes on an annual basis the consumer still appears to be losing momentum with growth falling from a peak of near 9% in 2011 and remaining stagnant for the past two years at an average of under 5%, however temporary reprieve from pump prices, and a lingering wealth effect from rising home prices and record-high equity markets have helped support consumer confidence and consumer spending.
“Going forward, however, temporary factors can only do so much,” Piegza says. “Consumers will need sustained job creation and income growth, which unfortunately do not go hand in hand.
Consumer spending is a closely watched indicator about the overall health of the American economy because it drives nearly 70% of all economy activity.