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Retail sales soft in November
Consumer purchases show unexpected drop when excluding autos; overall sales just short of forecasts.
December 13, 2005: 10:11 AM EST

NEW YORK (CNNMoney.com) - U.S. consumers bought less than expected in November, according to a government report Tuesday, although a drop in gasoline prices actually led to some of the decline in spending.

Retail sales posted a 0.3 percent gain in the month, similar to a revised October reading but less than the 0.4 percent gain forecast by economists surveyed by Briefing.com.

A closely watched part of the report that excludes spending on autos showed a 0.3 percent decline, rather than the forecast reading of unchanged sales on that basis. Sales excluding autos gained a downwardly revised 0.8 percent in October.

But there was some good news in the softer sales, as part of the decline was due to less spending at the gasoline pump. Sales at gas stations fell 5.9 percent in the month. Excluding sales at gasoline stations, sales at all other retail establishments actually gained 1 percent, compared to a 0.4 percent gain on that basis in October, when spending at gas stations fell by only 0.6 percent.

Auto dealers reported the best gains, with a 2.7 percent rise, while building material and garden equipment stores followed close behind with a 1.9 percent increase from October.

But the report also showed some modest gains in the types of stores that depend on the all-important holiday shopping season that started in November. Department stores saw a seasonally adjusted 0.5 percent increase in sales compared to October, as did electronics and appliance stores. Clothing stores posted a 0.2 percent increase.

However, sporting goods, book and music retailers saw a collective 0.6 percent decline in sales.

Economists who spoke to Reuters said the report showed a general softness in consumer spending heading into the holiday season.

"This was a disappointing number relative to expectations and certainly consistent with the idea that consumer spending is going to be a much smaller contributor to economic growth in the fourth quarter than in the third," Chris Probyn, chief economist at State Street Global Advisors in Boston, told Reuters.

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For a look at a special report on the holiday shopping season, click here.  Top of page

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