BUSINESS

US retail sales rise a solid 0.7 pct. in November; spending up on autos, clothes, electronics

12/11/2014 09:42 EST | Updated 02/10/2015 05:59 EST
WASHINGTON - U.S. retail sales perked up in November with the start of the holiday shopping season, led by online buying and purchases of autos, clothing and electronics.

Retail sales rose a seasonally-adjusted 0.7 per cent last month, the Commerce Department said Thursday. Falling gasoline prices caused purchases at gas stations to decline 0.8 per cent, but that potentially freed up income to be spent elsewhere.

Excluding gas stations, sales climbed a healthy 0.9 per cent. Spending on motor vehicles accelerated 1.7 per cent, while purchases at clothiers, online retailers, electronics stores and department stores all improved. Non-store retailers, which include online and mail-order outlets, rose 1 per cent.

The sales figures indicate that consumers have pumped up their holiday shopping, despite initial signs within the retail industry that Black Friday shopping plunged compared to the previous year.

Sales are up 5.1 per cent over the past 12 months.

"In the months ahead, we expect consumers keep spending the extra income gained from the strong job market and the collapse in energy prices," said Laura Rosner, an analyst at the bank BNP Paribas.

Average national gas prices have slid to $2.64 a gallon, down nearly 30 cent, or 9.8 per cent, over the past month, according to the AAA's Daily Fuel Gauge.

Many analysts believe that holiday spending could rise by at least 4 per cent this year because of recent job growth. The hiring spree since February has bolstered the number of people with steady paychecks by nearly 2.65 million, and consumer confidence has also improved.

Employers added 321,000 jobs in November, and the unemployment rate held steady at 5.8 per cent, the Labor Department reported last week.

Still, initial indicators suggested that the Thanksgiving and Black Friday weekend was bleak for traditional retailers.

An estimated 133.7 million people shopped in stores and online, down 5.2 per cent from a year ago, according to a survey of 4,631 people conducted by Prosper Insights & Analytics for the National Retail Federation. Total spending for the weekend was projected to fall 11 per cent to $50.9 billion from a year ago.

That hints at the absence of meaningful wage gains for many workers, despite recent job growth. Average hourly wages have risen just 2.1 per cent over the past 12 months, slightly ahead of inflation.

But consumer tastes might also be shifting. There are signs that holiday shopping began earlier in the month than last year, as consumers have become fatigued by Black Friday mania. Also, there are signs of people forgoing smaller expenditures to replace bigger ticket items such as automobiles.

Motor vehicles sold in November at an annualized clip of 17.2 million, a 4.6 per cent increase from the prior year, according to Autodata Corp.

Subaru and Chrysler led the major automakers with sales increases around 20 per cent on strong demand for their small SUVs.