Washington—As retailers face their shortest holiday selling season in recent memory from Thanksgiving to Christmas, the U.S. Department of Commerce today offered some potentially very good news about the start of the season…Retail sales in November edged up 0.7% to $432.3 billion, the largest increase since June and ahead of economists’ estimate for a 0.6% increase.
While the November data got a boost from a 1.8% increase in sales of automobiles and parts, core retail sales, which exclude autos, gas and building materials, posted a 0.5% increase after rising 0.7% in October.
Economists said that was an optimistic indication considering that it was an improvement from a two-year low in third quarter.
“The bottom line is that underlying sales growth has been strengthening for some months now,” said Paul Dales, senior U.S. economist at Capital Economics. “This will continue as jobs growth accelerates and as the rises in equity and house prices boost wealth.”
But Clothing, Accessories Sales Decline
According to the National Retail Federation – the world’s largest retail trade association– November retail sales, excluding automobiles, gas stations and restaurants, increased 0.6% percent seasonally adjusted month-to-month, and 3.9% unadjusted year-over-year.
“Consumers took advantage of a very promotional holiday season to shop at their favorite retailers during the Thanksgiving weekend,” NRF President/CEO Matthew Shay said. “Consumer confidence and sentiment are steadily improving, but spending remains at a modest pace. While it seems that the economy is improving, the future remains far from certain.”
Most of the major consumergoods categories reported increases, the Commerce Department reported. Ironically, clothing and clothing accessories had a 0.2% decline after increasing 2.6% in October and being cited as one of Black Weekend’s bestsellers by several studies.
Sales at general merchandise stores edged up 0.1% from October while department stores were up 0.3% though they were down 2.6% from November 2012.
A nonstore retailer, which includes e-commerce, had a 2.2% increase from October and a 9.4% increase year over year.
“Once again, consumers have demonstrated their ability to drive the economy forward,” NRF Chief Economist Jack Kleinhenz said. “By-and-large, consumers have pent-up purchasing power and are willing to spend this holiday season. Retailers will compete for each and every shopper and sale, and promotions and deals will continue throughout the month. Although this holiday season will remain challenging for some retailers, today’s sales report bodes well for a solid holiday sales season, and may provide the foundation for accelerating economic growth and momentum in the New Year