Retail Sales Up in November for Third Month in Last Four

Good times seems to be starting again for media marketing executives as ad revenues are beginning to stabilize with manager's sales volume reports based on the stronger spot sales booked in 1st quarter. The report is inclusive of advance sales booked from multi-media platforms inclusive of mobile and Internet, being part of TV and radio management reporting as of the end of November. Phiip J. LeNoble, Ph.D............
FOX Business December 11, 2009
U.S. consumers stepped up their spending in November and grew more optimistic this month, data showed on Friday, raising hopes a self-sustaining economic recovery was starting to unfold.
The Commerce Department said total retail sales increased 1.3% last month, the largest advance since August, after rising 1.1% in October. It was the second straight monthly gain and beat market expectations for a 0.7% gain.
A separate report showed consumer sentiment improved in early December on signs of stabilization in the labor market.
The data were the latest in a series showing the economy may expand at a brisker pace in the fourth quarter than the 2.8% annual rate in the July-September period.
"The improvement in confidence is a complement to the good retail sales. It suggests that the consumer is slowly turning upward," said Alan Gayle, senior investment strategist, Ridgeworth Investments in Richmond, Virginia
The data lifted U.S stock indexes and the U.S. dollar rose sharply against the yen and euro.
The Reuters/University of Michigan Surveys of Consumers said its preliminary index of sentiment for December rose to 73.4, just a touch below the year's high set in September. This was above the 67.4 for November and exceeded economists' expectations of a reading of 68.5.
The data eased concerns that the economy's recovery could falter because of lackluster consumer spending. The economy resumed growing in the third quarter, fueled mostly by government stimulus.
With the labor market starting to stabilize and household wealth rising, there is growing optimism that consumer spending will soon pick up.
CONSUMERS RAMPING UP SPENDING
Overall sales in November were boosted by strong receipts from gasoline stations, increased purchases of motor vehicles and parts, building materials and electronic goods among others.
"The numbers were a pleasant surprise. Consumers are starting to spend a little more freely than they have been and that is going to be an important source of sustainable growth," said David Resler, chief economist at Nomura Securities International in New York.
Despite slightly lower gasoline prices at the end of November from the end of October, sales at service stations surged 6%, the largest increase since June.
Compared to November last year, overall retail sales were up 1.9%, the first year-on-year gain since August 2008, a Commerce official said.
Some analysts said the unexpectedly strong data could cause problems for the U.S. Federal Reserve. The U.S. central bank, which meets next week, has committed to keep interest rates near zero for an "extended period", while watching to see if the recovery will pick up steam.
"The big picture ... is that the recovery looks to be more on track. That combination of improvements in the labor market and improvements in consumer spending is a strong signal that we're not at this point entering into a double-dip scenario," said Torsten Slok, senior economist at Deutsche Bank in New York.
"There is definitely a significant upside risk here that we will have a stronger recovery than what the Fed and what the consensus was expecting. That's probably causing headaches ... the thing that's at the center of their radar screen is when should we remove the 'extended period' language."
Excluding motor vehicles and parts, retail sales increased 1.2% in November, the largest increase since January, after being flat in October. Economists had expected a 0.4% increase.
Core retail sales excluding autos, gasoline and building materials rose 0.6%, advancing for a fifth straight month.
"Spending is increasing, which is good, but we'll see how sustainable it is," said Kurt Brunner, portfolio manager at Swarthmore Group in Philadelphia, Pennsylvania.
Sales of building materials climbed 1.5% last month, the biggest gain since April 2008, after falling 1.8% in October. Purchases of electronics and appliances jumped 2.8%, the largest increase since January.
Another government showed report U.S. business inventories unexpectedly rose in October for the first time in more than a year.