Finance Globe

U.S. financial and economic topics from several finance writers.
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Retail Sales up for 5th Consecutive Month

Retail sales in November were better than analysts had expected, as American consumers loosen up the purse strings in preparation for the holiday season.

November sales increased by .8% from the previous month, and increased by 7.7% since last year in November 2009, the Commerce Department reported today in Washington.

November’s increase follows a revised increase of 1.7% in October. October’s big jump in retail sales was partly due to a large increase in auto sales, which slacked off by November. Though motor vehicles and parts dealer sales fell in November by .8% from the previous month, they were still 12.5% above the level a year ago.

Many types of retailers showed modest growth and some had a small decrease over-the-month, but nearly all have significantly increased from the same month a year ago. The economy was in terrible shape back then, and it’s still not so great now with unemployment remaining high. But with our economy as dependant as it is on consumer spending, it’s a step in the right direction.

Building supplies and lawn and garden retail sales fell by .1% in November from the previous month, reflecting that fewer consumers work on home projects in the cooler months and as the holidays approach. But sales from these types of stores were 12.3% higher than they were in November 2009 - consumers are spending money on making their homes more comfortable, that’s a good sign for the economy.

Sporting goods, music, book and hobby store sales increased in November by 2.3%, not surprising as these types of places tend to be high on the list in the gift-giving season. But sales in these types of retailers are up by 12.3% from the same month a year ago. Are shoppers being more generous than they were last year, or are they gifting a few extras to themselves? Either way, more spending on non-essential items is another positive sign.

Sales in November for non-store retailers, which includes online-only retailers and mail-order houses, increased by 2.1% from the previous month and was 14.2% higher than it was a year ago. Non-store retailers offer the convenience of 24-hour shopping without ever leaving home, so consumers may be allowing themselves to do some impulsive shopping since they are feeling better about things.

Furniture store sales fell by .5% from October and have only gained by .6% over the year. Similarly, electronics and appliance retailers experienced a .6% drop in sales from October and a gain of .9% since November 2009.

These two types of retailers were the weakest performers in the Commerce Department’s data and may reflect that while consumers are spending more in other areas, they are fine with what they have when it comes to big-ticket items. Also, many consumers upgraded their home furnishings and appliances during the boom when credit was easy and their jobs were secure, so the durable goods they already own have many years of life left in them.

U.S. Commerce Secretary Gary Locke said, “Retail sales data have now shown five consecutive months of strong gains and underscore continuing growth in consumer spending. Retail sales is one of many positive economic indicators that confirm our economy is moving in the right direction.”



Source:
U.S. Census Bureau
U.S. Department of Commerce
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Thursday, 24 October 2019

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