Retail sales rose much more than expected in November, the Commerce Department said Friday, with consumer-discretionary items helping as consumers prepare for the holidays.
According to the government, retail sales rose 1.3% last month, which was considerably better than the 0.7% rise that economists had been looking for.
While auto and gasoline sales were stronger in November partially because of higher energy costs, retail sales were strong across the entire spectrum. Excluding sales of gasoline and autos, retail sales climbed 0.6% in November, which was better than the 0.2% rise economists expected.
With this report, retails sales are now positive from this time a year ago, yet another sign that economy is slowly mending after the two-year recession.
"Consumers are clearly starting to increase spending, likely reflecting pent-up demand," said Michelle Meyer, an economist with Barclays, in a note. "We believe the backdrop for consumers is decidedly improving, supporting our outlook for a sustained economic recovery."
For the sectors most exposed to the U.S. consumer, furniture retailers saw sales fall 0.7%, while electronic and appliance sales rose 2.8% going into the holidays. Food and beverage stores increased 1.0% while clothing and apparel sales fell by 0.7%.
The energy-related sales were higher primarily on higher fuel costs. Filling station sales rose 6% in the month compared to a year ago while the sale of autos and parts rose 1.2%.
The report, along with a better than expected report by the University of Michigan, helped lift nearly all of the retailers in Friday's session led by the department stores Macy's (M), Saks (SKS), Dillard's (DDS) and Nordstom (JWN).
Online retailers likely to see gainPersonal Spending Rises by Better-Than-Expected 0.7% in October
