US retail sales rose 0.3 per cent in November, reflecting rebound after Superstorm Sandy

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WASHINGTON - Americans spent more online in November to the start of the holiday season and began to replace cars and rebuild in the Northeast after Superstorm Sandy.

U.S. retail sales rose 0.3 per cent in November from October, the Commerce Department said Thursday. That offset a 0.3 per cent decline in October from September.

The figures were much stronger after factoring out gas prices, which have fallen sharply in recent months. When excluding gas station sales, retail sales increased a solid 0.8 per cent.

The gains were widespread, although much of the strength reflected a rebound from the storm. Auto sales jumped 1.5 per cent, as many people sought to replace damaged vehicles. Sales at home improvement stores increased 1.6 per cent.

There was also an indication that many Americans began shopping for the holidays, most likely taking advantage of promotions during the Thanksgiving Day weekend. Electronic and appliance sales rose 2.5 per cent. Furniture sales increased 1 per cent. And sales that reflect online shopping surged 3 per cent — the biggest gain for that category in 13 months.

Still, there were also troubling signs for the holiday shopping season: Department stores sales dropped 0.8 per cent. And sales at general merchandise stores, a broader category that includes Wal-Mart and Target, fell 0.9 per cent.

Some economists worry that consumers might scale back on holiday shopping if they are concerned about the "fiscal cliff." That's the name for tax hikes and spending cuts that are scheduled to go into effect next year if Congress and President Barack Obama cannot reach a deal to avert them.

The retail sales report is the government's first look at consumer spending. Consumer spending is important because it drives nearly 70 per cent of economic activity.

The economy grew at a solid 2.7 per cent annual rate in the July-September quarter. But the gains were mostly because businesses stepped up restocking, which drove more factory production.

Consumer spending actually slowed over the summer from the previous quarter. And many economists worry that consumers have remained cautious in the final three months of the year, because of the storm and their fears about higher taxes next year. That should keep growth below an annual rate of 2 per cent in the October-December quarter, they say.