November retail sales head up, according to Commerce and NRF

Holiday spending spurred increased retail sales activity for the month of November, according to data released by the National Retail Federation and the United States Department of Commerce earlier today.

Commerce reported that November retail sales at $432.3 billion were up 0.7 percent compared to October and up 4.7 percent compared to November 2012. Total retail sales from September through November are up 4.1 percent annually.

The NRF reported that November retail sales, which exclude autos, gas stations, and restaurants, were up 0.6 percent on a seasonally-adjusted basis from October and were up 3.9 percent on an unadjusted basis annually, which the group said in in line with its holiday sales forecast (for the months of November and December) of 3.9 percent annual growth at $602.1 billion.

“Once again, consumers have demonstrated their ability to drive the economy forward,” NRF Chief Economist Jack Kleinhenz said in a statement. “By-and-large, consumers have pent-up purchasing power and are willing to spend this holiday season. Retailers will compete for each and every shopper and sale, and promotions and deals will continue throughout the month. Although this holiday season will remain challenging for some retailers, today’s sales report bodes well for a solid holiday sales season, and may provide the foundation for accelerating economic growth and momentum in the New Year.”

NRF added that in November consumers leveraged a “very promotional holiday season” during Thanksgiving weekend, coupled with improving consumer confidence and sentiment, despite modest spending levels amid an uncertain economic outlook.
As previously reported, with retail sales growth still relatively modest, there still remains a mixed bag of signals and headwinds on the economic front, including a slightly declining unemployment rate, improving consumer confidence data, as well as encouraging automotive sales and housing data.
These things continue to occur, though, against the backdrop of sluggish GDP growth and general uncertainty regarding the economy.
At recent industry conferences, many shippers and carriers were optimistic about fourth quarter retail sales, spurred on in large part by increasing e-commerce activity. Shippers told LM they are allocating inventory and watching inventory levels with a watchful eye and careful planning in advance of holiday shopping, when it kicks off in earnest in the coming weeks.
Eric Starks, president of freight transportation forecasting consultancy FTR said that the NRF’s expectations for a 3.9 percent year-over-year increase for holiday sales are realistic.

“Historically we would expect holiday says to be considered ‘good’ if we saw something north of 5 percent,” he said. “Thus, their current forecast would be termed a ‘ho-hum’ year. Not bad, but not great. All of the different sectors are not seeing the same type of growth. This is making it difficult to see how the industry could be noticeably above 4 percent for the holiday season. The monthly data continues to support an economy growing in the low-to-mid 2 percent range. This is right in line with our current GDP forecast.”