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Economy in Brief

U.S. Retail Buying Strengthens Unexpectedly
by Tom Moeller  December 14, 2017

The consumer exhibited noticeable buying power last month. Total retail sales and spending at restaurants jumped 0.8% (5.8% y/y) during November following a 0.5% October increase, revised from 0.2%. A 0.3% improvement had been expected in the Action Economics Forecast Survey. Sales of motor vehicle & parts eased 0.2% (+6.3% y/y) following two months of strong increase, as unit vehicle sales fell 3.1%. Retail sales excluding autos jumped 1.0% (5.7% y/y) after a 0.4% rise. A 0.6% gain had been expected.

The rise in retail spending reflected a 2.8% increase (12.2% y/y) in gasoline service station sales, as pump prices strengthened. Retail sales excluding both motor vehicles and gasoline rose 0.8% (4.9% y/y) following a 0.3% October gain. The three-month annualized rate of increase in these sales surged to 8.5%, double last year's growth rate and the strongest rate of growth since early-2014.

Strength in sales was broad-based last month. Sales of nonstore retailers surged 2.5% (10.4% y/y), recovering after a 0.4% October dip. Building materials & garden equipment store sales gained 1.2% (10.7% y/y) following a 0.1% slip. Appliances & electronics store purchases strengthened 2.1% (6.4% y/y) after two monthly increases of roughly 1.3%. Furniture & home furnishing store sales grew 1.2% (8.2% y/y) following a 1.8% rise. Sporting goods store sales improved 0.9% (2.9% y/y) after two monthly increases of 1.4% or more. Clothing  accessory store sales grew 0.7% (2.8% y/y) for the second straight month. Lagging behind were general merchandise store sales which remained unchanged (3.6% y/y) following a 0.1% uptick.

In the non-discretionary sales categories, sales of health and personal care stores rose 0.4% (3.1% y/y) following a 1.3% jump. Food & beverage stores realized 0.2% growth (3.2% y/y), the weakest of five monthly increases.

Restaurant sales and drinking place sales improved 0.7% (2.2% y/y) following a 0.4% rise.

The retail sales data can be found in Haver's USECON database. The Action Economics forecast is in the AS1REPNA database.

Retail Spending (%) Nov Oct Sep Nov Y/Y 2016 2015 2014
Total Retail Sales & Food Services 0.8 0.5 2.0 5.8 3.2 2.6 4.3
  Excluding Autos 1.0 0.4 1.3 5.7 3.0 1.4 3.8
  Non-Auto Less Gasoline 0.8 0.3 0.9 4.9 3.9 4.2 4.6
Retail Sales 0.8 0.6 2.3 6.3 2.9 1.9 4.1
  Motor Vehicle & Parts -0.2 1.2 4.8 6.3 4.1 7.3 6.4
 Retail Less Autos 1.1 0.4 1.6 6.3 2.5 0.4 3.4
  Gasoline Stations 2.8 0.3 6.0 12.2 -5.7 -17.6 -2.0
Food Service & Drinking Places Sales 0.7 0.4 -0.1 2.2 5.9 8.1 6.1
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