Plunging gasoline prices have allowed cash-strapped consumers to spring for restaurant meals in the last few months. Now, they’re hungry for more than dinner.
Retail sales climbed 0.7 percent in November, the most in eight months, with demand improving in 11 of 13 major store categories. The gains come as the average price of a regular gallon of gasoline has sunk 29 percent from this year’s peak in April, giving Americans a few extra dollars to spend each week.
At first, consumers probably considered the relief in gas prices to be temporary, largely relegating that marginal income to dining out, said Steven Blitz, chief economist at ITG Investment Research Inc. in New York. Now households may perceive the plunge at the pump to be longer lasting and are comfortable broadening their spending to items including books and electronics, he said.
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