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Economy in Brief

U.S. Retail Sales Recovered
by Tom Moeller December 13, 2006

US retail sales last month recovered all of the weakness during the prior three months. Sales rose 1.0% following a 0.1% decline in October and a 0.6% shortfall in September which both were revised slightly shallower. The November increase easily beat Consensus expectations for a 0.2% rise.

Sales by motor vehicle & parts dealers rose 0.9% (6.4% y/y) after an upwardly revised 1.0% October gain. New unit vehicle sales, however, fell 0.7% to 16.04M for the third decline in the last four months. Excluding autos, retail sales surged 1.1% after a slightly revised 0.3% October dip.

Sales of some discretionary items recovered. Sales at furniture, home furnishings & appliance stores surged 2.1% (6.7% y/y) after an unrevised 0.4% October drop. Also up were building material sales which jumped 1.8% (4.2% y/y). Sales of nonstore retailers (internet & catalogue) made up for weakness during the prior three months with a 1.3% (10.1% y/y) jump.

Restaurant and bar sales rose 0.7% (7.9% y/y) after firm gains during the prior four months.

Still lagging, however, were apparel store sales which fell marginally (+6.7% y/y) after a 0.6% decline during October and, with a 0.4% (3.8% y/y) increase, sales at general merchandise stores recovered an unrevised 0.3% October decline.

Sales at gasoline service stations recovered 2.3% after three months of decline though gasoline prices slipped another 0.7% last month to $2.23 per gallon.

Nonauto retail sales less gasoline in November jumped 0.9% (6.4% y/y), triple the 0.3% increases during each of the prior three months. During the last three months these sales rose at a 6.5% annual rate, the best since March.

  November October Y/Y 2005 2004 2003
Retail Sales & Food Services 1.0% -0.1% 5.6% 7.2% 6.2% 4.2%
  Excluding Autos 1.1% -0.3% 5.3% 8.2% 7.2% 4.7%
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