November retail sales are up, according to Commerce and NRF data
December 14, 2010
Retail sales showed continued strength as November numbers showed annual gains, according to data released by the United States Department of Commerce and the National Retail Federation (NRF).
November retail sales, which include non-general merchandise like automobiles, gasoline, and restaurants, were $378.7 billion for a 0.8 percent increase from October and a 7.7 percent annual gain, according to Commerce. Total retail sales for the September to November 2010 timeframe were up 7.8 percent year-over-year, and Commerce revised the September to October 2010 increase from 1.2 percent to 1.7 percent. November also marked the fifth straight month of increased retail sales, according to Commerce data, and is the highest month for retail sales since November 2007.
And the NRF reported that November retail sales, which exclude automobiles, gas stations, and restaurants, were also up 0.8 percent from October and up 6.8 percent unadjusted year-over-year. The NRF also revised its forecast for holiday season retail sales from 2.3 percent to 3.3 percent, indicating that the upward revision was due to improvements in various economic indicators, including stock market gains, recent income growth, and increased personal savings rates, which are resulting in consumers’ increased ability to spend.
“Consumers have not been suffering from a lack of spending power, they’ve just been missing the confidence to use it,” said NRF Chief Economist Jack Kleinhenz in a statement. “With noticeable improvement in key economic indicators combined with great deals on merchandise, consumers have certainly shown they shouldn’t be counted out this holiday season.”
Following a first half of 2010, which showed some signs that sustained economic growth was occurring, overall economic activity, especially early on in the second half of the year, slowed down. But in recent weeks, due in part to holiday season spending, there have been some signs that things may be looking up again.
This sentiment has also been on display in freight transportation volumes like trucking and intermodal, which continue to show solid year-over-year gains, when compared to a dismal 2009.
“These numbers from my standpoint were great,” said Eric Starks, president of freight transportation forecasting firm FTR Associates. “It looks like the consumer appears willing to spend through this sluggish period. That suggests that there is some momentum push there and that is a great thing.”
Starks added that with retail sales showing sustained improvement over the last five months that it is possible freight transportation volumes will be more in sync with retail numbers, when it comes to both sets of data growing.
While freight data overall has been somewhat sluggish, especially when compared to pre-recession levels, Starks said that these retail numbers provide some optimism that there may be better freight data on the horizon, especially freight with a retail-oriented focus.
“We have seen manufacturing continuing to do OK although it is not growing at the same rates as it did three or four months ago, but it is still at a healthy pace and there is still momentum in the system,” said Starks. “Manufacturing led us out of this initial recovery, and the consumer kind of [held] back. It looks like the consumer is starting to participate now and pick up the pace…otherwise it will not be a sustainable recovery. This is a good sign from that standpoint and as consumers start to get more comfortable in buying, then businesses will free up some cash on hand. If they are confident consumers are going to stick around they will spend that cash more freely.”
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