US retail sales barely rise at start of holiday shopping

By Josh Boak, The Associated Press

WASHINGTON – Americans increased their retail spending just slightly in November, a possible sign of lacklustre holiday shopping.

Retail sales rose only 0.1 per cent in November, after a downwardly-revised 0.6 per cent growth in October, the Commerce Department said Wednesday.

Consumers bumped up their purchases at restaurants and furnishers last month. But they also trimmed spending at auto dealers and department stores, limiting the overall advance in retail sales.

“This report puts a slight blemish on an otherwise solid string of U.S. economic data,” said Michael Dolega, senior economist at TD Bank. “The disappointing headline suggests that consumers are yet to fully open their wallets despite continued job and income gains.”

More Americans had seemed to enter the holiday season poised to shop. The improving job market has pushed unemployment down to 4.6 per cent and prompted signs of accelerating wage growth. Over the past 11 months, retail sales have risen a solid 3.1 per cent compared to the same period in 2015. The greater retail sales helped support overall economic growth.

Consumer spending accounts for the majority of all U.S. economic activity. It has disproportionately contributed to an economy that expanded at an annual clip of just 1.8 per cent over the first nine months of 2016. And more Americans turned optimistic about the economy after Donald Trump’s presidential election with consumer sentiment improving.

Still, the retail sales report suggests that some of that momentum stalled last month.

Online and mail-order retailers posted a lukewarm 0.1 per cent gain, compared to a robust 11.5 per cent increase so far this year. Clothing sales were flat in November.

Nor was every sales category increase an automatic win for consumers. Higher gasoline prices last month prompted a 0.3 per cent boost in sales at service stations.

Yet the retail sales report does point to a steady evolution of the U.S. economy.

As average hourly earnings have picked up 2.5 per cent over the past year, more Americans are comfortable eating out. Sales at restaurants and bars have risen 6 per cent so far this year. Rising home sales in 2016 have also helped building materials stores and furnishers, which have seen their sales advance 6.3 per cent and 3.9 per cent over the past 11 months.

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