Retail sales surge in November
Total sales jump 1.2%, trouncing expectations; sales excluding cars rise 1.8%, also trumping forecasts.
NEW YORK (CNNMoney.com) -- Retail sales surged last month, trouncing estimates, after steep discounting on holiday merchandise such as electronics, clothes and home-related goods gave merchants a solid start to this year's holiday shopping season.
The U.S. Commerce Department said total sales rose 1.2 percent in November, up from a 0.2 percent gain in October.
Howerever, overall sales were boosted by a 6.8 percent increase in sales at gasoline stations. But even without the gas pump price surge, retail sales rose a solid 0.6 percent.
Economists surveyed by Briefing.com had forecast a rise of 0.6 percent for the month.
"These retail sales numbers are amazing. It's hard to find any weakness in the report," said Scott Hoyt, director of consumer economics with Moody's Economy.com. "Even excluding gasoline sales, which everyone was expecting would inflate the overall number, it's a pretty good report."
Holiday discounting by retailers, combined with strong Black Friday sales, likely boosted purchases last month, Hoyt said.
Stripping out volatile auto sales which dipped 1 percent, retail sales jumped a much better-than-expected 1.8 percent versus a 0.4 percent increase in October. Economists, on average, had forecast an ex-auto gain of 0.6 percent for the month.
Hoyt said the strong sales gains seen across-the-board from electronics, clothing, food and beverage and even furniture sellers convinced him that the U.S. economy "is not suffering any collapse in consumer spending growth."
"Instead, we're almost getting a slight acceleration in spending," he said.
Earlier this month, Thomson Financial said sales at retail stores open at least a year, a key measure of store performance known as same-store sales, rose 4 percent in November. That topped the initial estimate for a 3.3 percent gain for the 43 retail chains tracked by the firm.
However, some retailers attributed better-than-expected same-stores sales last month to a calendar shift that added an extra reporting week for sales into November from December.
Tim Winters with the U.S. Census Bureau, which estimates retailers' monthly sales, told CNNMoney.com that that the government retail sales for November also were adjusted to account for this year's calendar variation.
He said next month's sales report would also be adjusted to factor in a shorter reporting cycle in December, although he did not confirm whether it would result in possible revisions in November's numbers.
If the government doesn't revise down December and November sales, Hoyt said he would be inclined to push up his fourth-quarter forecast for GDP (gross domestic product) growth.
Hoyt's forecast currently calls for a 1.3 percent increase in fourth-quarter GDP growth.
"Some categories do look suspiciously strong," Hoyt said, referring to a 1.2 percent jump in sales of building materials and a 1 percent increase in furniture sales. These would be categories for downward revisions."
Excluding both gasoline and auto sales, core retail sales rose 1.1 percent last month, according to UBS economist Kevin Cummins.
"This is very surprising because it shows that there was base strength in core retail sales," Cummins said.
Like Hoyt, Cummins said he expects next month's government sales report could show downwards revisions to some of the sales numbers because of the seasonal volatility associated with the November-December reporting period.
"Anecdotal information and our weekly UBS chainstore sales tracker showed that the start of the holiday season was good," Cummins said. "Weekly sales have weakened in early December although we could get a pick-up closer to Christmas."
Hoyt said decent wage increases, a tight labor market and an unemployment rate that's still under 5 percent were the catalysts to last month's spending spree.
"Also lower interest rates are helping retailers because there still are people who are refinancing their home equity and taking cash out to shop," he said.