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Economy in Brief

U.S. Retail Sales Firm Entering Holiday Season
by Tom Moeller  December 14, 2010

Holiday cheer was very evident in the latest retail spending report from the Commerce Department. Sales rose 0.8% during November (7.7% y/y) following gains of 1.7% and 0.9% during the prior two months, respectively, revised from 1.2% and 0.7%. The rise outpaced expectations for a 0.6% increase. During the last three months, sales have risen at a 14.6% annual rate. Excluding a 0.8% decline in motor vehicle sales, November spending looked even stronger posting a 1.2% increase which was double expectations. The rise followed upwardly revised increases of 0.8% during each of the prior two months. During the last three months, nonauto sales have risen at a 12.0% rate.

Strength in sales was most evident in apparel store spending which jumped 2.7% (7.5% y/y), double the October gain. General merchandise store sales also were strong posting a 1.3% increase (5.0% y/y) following five consecutive months of more moderate rise.Again, much retail shopping was done on-line. Sales of non-store retailers jumped 2.1% (14.2% y/y) after increases between 0.8% and 1.8% during the prior three months. Currently, sales by electronic shopping & mail-order houses account for nine percent of nonauto retail sales less building materials & gasoline.Finally, higher prices lifted gasoline service station sales by 4.0% (9.0% y/y).

On the weak side was a 0.6% slip in motor vehicle sales last month which approximated the unchanged level of unit vehicle sales versus October. Building materials and hardware stores sales slipped 0.1% (12.3% y/y) following three months of strong gain. Furniture store sales fell 0.5% after an 1.2% October decline (+0.6% y/y) while sales at electronics and appliance stores also fell 0.6% (+0.9% y/y) for the second consecutive down month. Interest in dining out again was modest as sales at food service and drinking places ticked up just 0.1% (3.9% y/y).

The retail sales figure are available in Haver's USECON database.

The Balance Sheet Recovery from the Federal Reserve Bank of Cleveland is available here.

Retail Spending (%) Nov. Oct. Sept. Year Ago 2009 2008 2007
Total Retail Sales & Food Services 0.8 1.7 0.9 7.7 -6.3 -1.0 3.3
   Excluding Autos 1.2 0.8 0.8 6.7 -5.1 2.3 3.9
Retail Sales 0.9 1.8 1.0 8.1 -7.1 -1.4 3.1
     Motor Vehicle & Parts -0.8 5.6 1.6 12.5 -12.0 -13.9 0.8
   Retail excluding Autos 1.4 0.9 0.9 7.1 -5.1 2.3 3.9
     Gasoline 4.0 1.3 1.7 9.0 -24.7 9.9 6.8
   Non-Auto Less Gasoline 1.0 0.8 0.8 6.8 -2.4 1.0 3.3
Food Service 0.1 0.5 0.1 3.9 0.6 2.4 5.2
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