The news on the retail front is a little better than expected. According to the Commerce Department, retail and food sales improved from October to November by 0.8% and 7.7% over last November. Producer prices rose, but mainly on increased energy and food costs:
The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for November, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $378.7 billion, an increase of 0.8 percent (±0.5%) from the previous month, and 7.7 percent (±0.7%) above November 2009. Total sales for the September through November 2010 period were up 7.8 percent (±0.5%) from the same period a year ago. The September to October 2010 percent change was revised from +1.2 percent (±0.5%) to +1.7 percent (±0.2%).
Retail trade sales were up 0.9 percent (±0.5%) from October 2010, and 8.1 percent (±0.7%) above last year. Nonstore retailers sales were up 14.2 percent (±3.1%) from November 2009 and auto and other motor vehicle dealers sales were up 12.8 percent (±2.5%) from last year.
We certainly can use a little good news as we head into the holiday season, but so far, it’s just mild to moderate good news. The baseline for these improvements come from the recent nadir of the economy, and while 0.8% month-on-month and 7.7% year-on-year is positive, the pace leaves a long way to go to get back to big gains in consumption and expansion. Part of this bounce comes from sales at gas stations, which rose 4% from October thanks to rapidly-rising gasoline prices, a warning of potentially inflationary fuel-price spikes down the road.
After gas stations, though, department stores, clothing stores, and sporting goods sales led the way with 2.8%, 2.7%, and 2.3% gains from October, respectively. The holiday sales began early this year, and it looks as though consumers welcomed them. On the flip side, auto dealer sales fell 1%, and electronics and appliance store sales fell 0.6%. The poor housing markets certainly explains the drop in furniture and home furnishing sales (-0.5%), but one might assume that electronics store sales would improve in the Christmas season.
Still, we’re off to a good start for retail’s most critical eight weeks of the year. Retail stores shed 9,000 jobs in November; perhaps the increased sales will restore some of the lost positions in December.