The Census Bureau announced that retail sales rose 0.3 percent in November, offsetting the 0.3 percent decline observed in October. Increased auto sales, which rose 1.4 percent in the month, were largely responsible for the higher figure. When motor vehicle and parts numbers were excluded, retail spending was unchanged from the month before. The other larger mover in these numbers was gasoline sales, which fell 4.0 percent due to lower per barrel petroleum costs. If you were to exclude both autos and gasoline, retail sales would have risen 0.7 percent.
Looking at specific sectors, the data were positive but mixed. Aside from higher auto sales, other businesses with increased retail sales in the month of November included nonstore retailers (up 3.0 percent), electronics and appliances (up 2.5 percent), building materials (up 1.6 percent), furniture and furnishings (up 1.0 percent), and clothing and accessories (up 0.9 percent). Repairs due to Hurricane Sandy likely contributed to some of these higher figures. These gains were somewhat counterbalanced by declining spending among grocery stores (down 0.5 percent) and department stores (down 0.8 percent).
Overall, these data suggest modest growth in retail spending, especially when gasoline sales are excluded from the analysis. Total year-to-date growth in retail sales were up 3.7 percent, essentially the same as was observed in October but a slower pace than earlier in the year. The year-to-date growth rate was 5.2 percent six months ago in May, for instance.
What these numbers have yet to show is the effect of the fiscal cliff on consumer spending. The University of Michigan consumer confidence index dropped significantly in December in large part because of worries about the future direction of the economy, and Wal-Mart’s CEO has said that Christmas spending has been hurt by talk of the fiscal cliff. Time will tell if these anxieties lead to slower growth in retail sales in the December data and beyond.
Chad Moutray is chief economist, National Association of Manufacturers.
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