The Census Bureau said that retail sales rose 0.7 percent in November. This extended the gains of October, which were revised up from the earlier estimate of 0.4 percent to a 0.6 percent increase. On a year-over-year basis, retail spending has picked up over the past two months, up from 3.5 percent in September to 4.1 percent in October to 4.7 percent in November. Still, this represents some deceleration from the 6.0 percent pace observed in June.
Motor vehicle sales were once again one of the bright spots, up 1.8 percent for the month and 10.2 percent over the past year. Growth in auto spending has rebounded from some weaknesses in the July to September timeframe, which is a definite positive.
The auto sector’s healthy increases skewed overall retail sales higher, but the broader market also reflected decent gains. Excluding autos, retail sales would have risen by 0.4 percent in November, with 3.5 percent year-over-year increases. Indeed, the broader segments beyond motor vehicles have also seen an acceleration in spending, with the annual pace in November up from 2.8 percent in both September and October. The year-over-year rate of non-auto retail spending peaked at 4.5 percent in June.
Other segments with higher retail spending in October included nonstore retailers (up 2.2 percent), building materials (up 1.8 percent), food services and drinking places (up 1.3 percent), furniture and home furnishings (up 1.2 percent), and electronics and appliances (up 1.1 percent). Among those with declining sales were miscellaneous store retailers (down 1.3 percent) and gasoline stations (down 1.1 percent). The drop in gasoline station sales stemmed from lower prices for its product, with the cost of West Texas intermediate crude falling from an average of $100.54 per barrel in October to $93.86 a barrel in November.
Chad Moutray is the chief economist, National Association of Manufacturers.