WASHINGTON – U.S. consumers shook off Superstorm Sandy last month and stepped up holiday shopping, helped by a steady job market and lower gasoline prices.
Retail sales rose 0.3 percent in November from October, reversing the previous month’s decline. Sales increased mostly because Americans spent more online, bought more electronics and began to replace cars and rebuild after the storm.
And a sharp drop in gas prices lowered the overall increase. Excluding gas stations, retail sales rose a solid 0.8 percent, the Commerce Department said Thursday.
Still, department store sales tumbled. And consumer confidence has slipped in recent weeks, which has raised concerns that some Americans may be growing worried about looming tax increases. That could dampen December sales. Many retailers depend on the two months of holiday shopping for roughly 40 percent of their annual revenue.
High unemployment and weak wage growth have kept consumers cautious about spending, which accounts for 70 percent of economic growth. Most economists expect slim gains in consumer spending in the final three months of the year, which is expected to keep growth weak.
Despite the positive numbers today, ... we are not in a consumer-led recovery, said Chris Christopher, an economist at IHS Global Insight.
A Labor Department report suggested the job market is improving, which could set the stage for more spending next year.
Applications for unemployment benefits fell by 29,000 last week to a seasonally adjusted 343,000.
That’s the second-lowest total this year.
Consumers are also seeing relief at the gas pump, which leaves them more disposable income. Gas prices have fallen almost 50 cents over the past two months, to a nationwide average of $3.30 a gallon, according to AAA.
And a third report suggested those declines will likely continue. Wholesale gas prices fell 10.1 percent in November, the Labor Department said. That’s the most in more than three years. It pushed down a measure of wholesale prices 0.8 percent, the most since May.
Falling gasoline prices are hurting sales at the pump, but helping many Americans spend at the mall, Christopher said.
Business inventoriesU.S. businesses stockpiles grew 0.4 percent in October from September, the Commerce Department said. But sales fell 0.7 percent.
Cuts on the horizon: Faster restocking and falling sales suggest companies may have ordered more goods than they need. Some could respond by cutting back on orders in coming months, which would slow factory output and economic growth.
Slower growth: A big increase in stockpiles accelerated economic growth in the July-September quarter. Most economists say inventory growth is slowing in the final months of the year.