BLBG: Retail Sales in U.S. Climbed Less Than Forecast
U.S. retail sales rose in November at the slowest pace in five months, indicating faster job growth may be needed to spark the biggest part of the economy.
The 0.2 percent gain in sales followed a 0.6 percent advance in October that was more than initially reported, Commerce Department figures showed today in Washington. Economists projected a 0.6 percent November increase, according to the median forecast in a Bloomberg News survey. Purchases excluding automobiles also rose 0.2 percent.
Retailers like J.C. Penney Co. and Gap Inc. (GPS) are relying on discounts to drum up sales as the labor market and incomes struggle to improve. To maintain spending, consumers have had to draw savings down to the lowest levels in four years.
“Looking at job creation, income growth, neither of those really suggest a strong spending scenario,” Lindsey Piegza, an economist at FTN Financial in New York, said before the report. “We’re still on very fragile footing.”
Retail sales were projected to pick up after rising a previously reported 0.5 percent in October, according to the Bloomberg survey. The 83 economists’ estimates ranged from advances of 0.2 percent to 1.1 percent.
The November gain was the smallest since a similar rise in June. The figures come as Federal Reserve policy makers meet today on interest rates.
Sales excluding automobiles and service stations increased 0.2 percent, less than the projected gain of 0.4 percent.
Seven of 13 major categories showed gains last month, led by a 2.1 percent jump at electronics and appliance stores.
Auto Sales
Sales rose 0.5 percent at automobile dealers, after a 0.8 percent increase the prior month, today’s report showed. Car and light truck sales in the U.S. advanced in November at a 13.6 million seasonally adjusted annualized rate, the best month since August 2009, according to researcher Autodata Corp.
Purchases excluding autos were projected to rise 0.4 percent, the survey median showed.
Filling-station sales declined 0.1 percent. The retail sales data, which aren’t adjusted for inflation, reflected a drop in gasoline receipts at service stations. Regular fuel at the pump averaged $3.38 a gallon in November, down from $3.43 a month earlier, according to AAA, the nation’s biggest auto group.
Demand at building-material stores decreased 0.3 percent.
Sales excluding autos, gasoline and building materials, which renders the figures used to calculate gross domestic product, climbed 0.2 percent after a 0.6 percent increase in the previous month.
Purchases increased 0.5 percent at clothing stores and 0.3 percent at general merchandise stores.
Thanksgiving Weekend
During the Thanksgiving weekend, spending jumped 9.1 percent per customer from a year earlier to $398.62, according to the National Retail Federation. Sales totaled a record $52.4 billion. For all of November, same-store sales for the more than 20 companies tracked by researcher Retail Metrics Inc. rose a combined 3.2 percent.
“We were positive throughout the month going into Thanksgiving and it only got better from there,” Timothy Johnson, senior vice president of finance at retailer Big Lots Inc. (BIG), said during a Dec. 2 earnings call. “We feel about as good as we can with the positive performance to begin, but also the acceleration, meaningful acceleration, we saw.”
J.C. Penney and Sears Holdings Corp. (SHLD)’s Kmart chain proclaimed on the front pages of their websites on Dec. 5 that it was Cyber Monday, a week after the actual event occurred. On this Cyber Monday, a term invented by the Washington-based NRF in 2005, deals ranged from 40 percent off a DVD player from Samsung Electronics Co. to 80 percent off a children’s camcorder.
More Discounting
Gap’s Banana Republic chain offered 30 percent off its merchandise in an event dubbed the “It’s not Black Friday” sale. The markdowns followed a greater-than-expected decline in November same-store sales.
An improving labor market could help sustain the gains in consumer spending, which accounts for about 70 percent of the economy. Payrolls climbed by 120,000 workers in November, and the jobless rate fell to 8.6 percent, the lowest since March 2009, from 9 percent, Labor Department figures showed Dec. 2.
Sentiment among consumers has also brightened. The Conference Board’s confidence index surged last month by the most since April 2003. The Thomson Reuters/University of Michigan preliminary index rose in December to a six-month high.
To contact the reporter on this story: Alex Kowalski in Washington at akowalski13@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
