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The numbers: Sales at U.S. retailers rose a solid 0.3% in November in a good start to the holiday shopping season, suggesting the economy might not be cooling off all that much.
Economists polled by The Wall Street Journal had forecast a 0.1% decline in sales. Sales had fallen in October for the first time in seven months.
Economists had a predicted a so-so holiday shopping season, but the November report appears to show that retail sales are track to post an above-average performance.
Retail sales represent about one-third of all consumer spending and usually offer clues on the strength of the economy.
Key details: Sales surged at Internet retailers such as Amazon
AMZN,
as well as stores that sell books, music and other hobby items.
Americans also spent more on clothes, furniture, health-care items and new cars and trucks.
Sales at bars and restaurants were also strong, climbing 1.6% in November.
People go out to eat more when they feel good about their own finances and the broader economy. Restaurant sales are up a sharp 11% in the past year, more than triple the rate of inflation.
Receipts at gasoline stations fell sharply again to hold down the headline number on retail sales. But it’s good news for consumers when they have to spend less on fuel because of cheaper oil prices.
Sales also fell at department stores and home centers such as Home Depot
HD,
Retail sales climbed 0.6% when car dealers and gas stations were set aside, giving a better understanding of consumer demand.
Big picture: Consumers can spend enough money to keep the economy growing because of the strongest jobs market in decades.
The unemployment rate sits near a low not seen in more than a half-century. Most people who want a job can find one. And wages are rising faster than inflation again.
Yet high interest rates and still-elevated inflation are costly for consumers, which has taken a toll on the economy. The U.S. is expected to post slower growth in the fourth quarter and the first half of next year.
Looking ahead: “The big jump in retail sales shows that the death of the consumer — as well as the economy — has been greatly exaggerated and the much-hyped recession of 2023 isn’t going to materialize,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.
Market reaction: The Dow Jones Industrial Average
DJIA
and S&P 500
SPX
were set to rise in Thursday trades.
