U.S. Retail Sales Top Estimates as Core Measure Up Most in Year

U.S. retail sales topped forecasts in November as a key measure jumped by the most in a year and October figures were revised higher, indicating consumers are giving a bigger boost to the economy than expected this quarter.

The value of overall sales rose 0.2 percent after a 1.1 percent increase the prior month, Commerce Department figures showed Friday. The median forecast of economists surveyed by Bloomberg called for a 0.1 percent gain.

Sales in the so-called control group subset, which some analysts use to gauge underlying consumer demand, climbed 0.9 percent, more than double projections, following a 0.7 percent increase in the prior month. The measure excludes food services, car dealers, building-materials stores and gasoline stations.

The report may alleviate some concerns that growth is significantly weakening and should bolster views that consumer strength is extending into the fourth quarter following two periods of robust gains. Lower fuel prices may have given a lift to other retail categories, as Americans took advantage of Black Friday sales that kicked off the holiday-shopping season.

The gain also reinforces traders’ bets that the Federal Reserve will lift interest rates next week for the fourth time this year. The figures may support the case for further tightening in 2019 after investors and economists marked down their projected paths for borrowing costs.

Online Shopping

Nine of 13 major retail categories showed increases in November, according to the Commerce Department data. The nonstore category, which includes online shopping, jumped 2.3 percent, the most in a year. Other solid gains were recorded at furniture and home furnishings stores, electronics and appliance vendors and health and personal care stores.

Filling-station receipts decreased 2.3 percent, the biggest decline since May 2017, the report showed. The Commerce Department figures aren’t adjusted for price changes, so lower retail sales in the category can reflect lower gasoline costs.

Sales at automobile and parts dealers rose 0.2 percent after increasing 1.5 percent in the prior month. Industry reports previously showed unit vehicle sales declined 0.6 percent from the prior month.

Excluding automobiles and gasoline, retail sales rose 0.5 percent, exceeding estimates, after a 0.7 percent increase the previous month.


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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell