Solid U.S. retail sales point to firming economic recovery
By Michael Flaherty
WASHINGTON (Reuters) - Jack Reed can see the recovery taking hold at his family's 109-year-old clothing store in Tupelo, Mississippi, with sales buoyed in part by the paychecks tied to a Toyota plant up the road and rising confidence that the jobs are here to stay.
As retailers nationwide reported a brisk jump in November sales and optimism about the holiday season, Reed said on Thursday that the gears of the U.S. economy seemed to have finally meshed.
"There is just less fear from people who feel like they might lose their jobs ... Our shoppers seem more confident than they did a year ago," said Reed, 63, whose chain of four stores clocked a roughly 10 percent jump in sales from Thanksgiving to this week, compared to the year before.
In a rural area that counts Elvis Presley among its native sons, the drop in gasoline prices also was leaving more money in people's pockets.
November's retail advance showed the holiday shopping season was off to a strong start, and dispelled the gloom from a drop in Black Friday weekend commerce. Black Friday, the day after Thanksgiving, has traditionally been seen as the kickoff for holiday sales, but analysts say consumers have shifted spending through the month and are doing more shopping online.
Coupled with strong job reports and signals of upcoming wage growth, the sales data could boost confidence in the durability of the recovery as the Federal Reserve debates when and how fast to raise U.S. interest rates.
Retail sales excluding automobiles, gasoline, building materials and food services, increased 0.6 percent last month after rising 0.5 percent in October, the Commerce Department reported. The so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. November's increase exceeded Wall Street's expectations for a 0.4 percent gain.
It also suggested that consumer spending, which accounts for more than two-thirds of U.S. economic activity, was accelerating in the fourth quarter after slowing in the July-September period. Continued...