The Census Bureau reported that retail sales grew by 0.2 percent in November, their slowest pace since June. This reflects a moderation from the 1.3 percent and 0.6 percent growth rates of September and October, respectively. The areas with the fastest growth included electronics and appliances (up 2.1 percent) and non-store retailers (up 1.5 percent). Motor vehicles and clothing stores posted gains of 0.5 percent for the month.
These gains, though, were offset by declines in building materials (down 0.3 percent), restaurants and bars (down 0.3 percent), grocery stores (down 0.2 percent) and gasoline stations (down 0.1 percent).
Overall, retail sales were up 6.75 percent between November 2010 and November 2011. This represents the slowest year-over-year rate since August 2010. While Black Friday sales were seen as strong, it is clear that these sales increases were not across-the-board and often reflected heavy discounting. Indeed, chain store sales, according to the International Council on Shopping Centers, reflected modest sales increases for November as a whole, with falling sales in the weeks surrounding Black Friday.
In other news, small business optimism has continued to rise. The National Federation of Independent Business’ Small Business Optimism Index rose from 90.2 in October to 92.1 in November. While this figure is below where it should be (e.g., an index of 100 or greater), this reflects an improvement in sentiment from the lows of the summer months. The index has risen for three consecutive months.
To be clear, anxieties about the economy still resonate, with economic conditions and the political climate high on the list of concerns among those citing that now is not a good time to expand. Yet, these concerns are ebbing little-by-little with each passing month, and the indices for employment, sales and capital expenditures improved in November.
The top concern, cited by 25 percent of the respondents, was once again “poor sales.” This was followed closely by “taxes” and “government regulations and red tape,” both of which received 19 percent.
Chad Moutray is chief economist, National Association of Manufacturers.