Sales at retailers and restaurants rose a seasonally adjusted 0.2% in November from October, the largest increase since July, the Commerce Department said Friday.
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Still, the slight rise in spending in November is less than the 0.3% rise expected by economists, and hardly reassures those looking to USA consumers for the freewheeling spending that could jump-start economic growth.
The remainder of the sectors showed gains, with food and beverage store sales rising 0.7% and sales at electronics stores up 0.6%. Only four out of 13 major spending categories declined.
These so-called core retail sales correspond most closely with the consumer spending component of U.S. gross domestic product.
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.
Sales also fell at automobile dealers last month.
November’s sales increase remains modest, but bodes well for retailers generally and makes a hike in the Federal Reserve’s overnight prime interest rate more likely.
Based on the industry data, the appetite for new cars is fueled by an improving economy, along with auto makers using rebates and other offers to draw shoppers to their showrooms and away from rivals.
But total sales were held down by lower prices for gasoline and weaker demand for autos. Still, households are proceeding cautiously and socking away much of their spare cash from cheaper gasoline. Sales at clothing stores rose 0.8%. Excluding gas, retail sales improved 0.3 percent last month and 3.6 percent from a year ago.
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Consumer spending, which accounts for more than two-thirds of US economic activity, surprisingly slowed in September and October. In October, the personal savings rate – the share of a person’s disposable income that is saved – hit 5.6%, the highest rate since 2012, even as personal income rose 0.4% from the previous month. That may be related to wage growth that has yet to pick up significantly. 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.
