US retail sales barely rise at start of holiday shopping

Posted at 9:11 AM, Dec 14, 2016

WASHINGTON (AP) -- Americans increased their retail spending just slightly in November, a possible sign of lackluster holiday shopping.

Retail sales rose only 0.1 percent in November, after a downwardly-revised 0.6 percent growth in October, the Commerce Department said Wednesday.

Consumers bumped up their purchases at restaurants and furnishers last month. But they also trimmed spending at auto dealers and department stores, limiting the overall advance in retail sales.

More Americans entered the holiday season poised to shop. The improving job market has pushed unemployment down to 4.6 percent and prompted signs of accelerating wage growth. Over the past 11 months, retail sales have risen a solid 3.1 percent compared to the same period in 2015. The greater retail sales helped support overall economic growth.

Consumer spending accounts for the majority of all U.S. economic activity. It has disproportionately contributed to an economy that expanded at an annual clip of just 1.8 percent over the first nine months of 2016. And more Americans turned optimistic about the economy after Donald Trump's presidential election with consumer sentiment improving.

Still, the retail sales report suggests that some of that momentum stalled last month.

Online and mail-order retailers posted a lukewarm 0.1 percent gain, compared to a robust 11.5 percent increase so far this year. Clothing sales were flat in November.

Nor was every sales category increase an automatic win for consumers. Higher gasoline prices last month prompted a 0.3 percent boost in sales at service stations.

Yet the retail sales report does point to a steady evolution of the U.S. economy.

As average hourly earnings have picked up 2.5 percent over the past year, more Americans are comfortable eating out. Sales at restaurants and bars have risen 6 percent so far this year. Rising home sales in 2016 have also helped building materials stores and furnishers, which have seen their sales advance 6.3 percent and 3.9 percent over the past 11 months.