Lackluster U.S. retail sales cast shadow on fourth-quarter economic growth

  • Lackluster U.S. retail sales cast shadow on fourth-quarter economic growth

Lackluster U.S. retail sales cast shadow on fourth-quarter economic growth

Economists polled by Reuters had forecast retail sales would accelerate 0.5 per cent in November.

Sales rose 0.2 percent, as compared with expectations of a rise of 0.5 percent. The retail figures aren't adjusted for price changes, so sales could reflect changes in gasoline costs, sales, or both.

Last month, auto sales increased 0.5% after rising 1.0% in October.

The critical holiday shopping season is off to a sluggish start in the U.S. But with Thanksgiving falling later in November there were fewer shopping days after Black Friday.

Parts of the country were also hit with a brutal snowstorm, which possibly discouraged some spending.

Bloomberg News reported Thursday that President Donald Trump signed off on a phase-one trade deal with China, averting the December 15 introduction of a new wave of USA tariffs on about $160 billion of consumer goods from the Asian nation, according to people familiar with the matter.

The report cited $528 billion in retail and food services sales, an increase of 0.2 percent over October. Compared to November a year ago, retail sales increased 3.3%. The increase was significantly lower than the 0.5 percent predicted by most analysts.

Stores such as Best Buy that sell electronics and appliances also posted a similarly strong increase. The measure excludes food services, vehicle dealers, building-materials stores and gasoline stations, providing a reading considered more reflective of underlying consumer demand. Separate data on the consumer price index this week showed that gasoline prices rose 1.1% in the month, which could have boosted these figures. Receipts at building material stores were unchanged and sales at clothing stores fell 0.6%. Spending at hobby, musical instrument and book stores dropped 0.5 per cent. Online and mail-order retail sales increased 0.8% after gaining 0.6% in October. Online sales have jumped 11.5% in the past year, almost quadruple the overall increase in retail sales.

Retail sales are watched closely because they provide the first read of consumer spending each month.

"Retail sales growth slowed in November, but not enough to put the fourth quarter's consumer spending profile at risk".

Economists did not expect a de-escalation in trade tensions between the United States and China to materially change the outlook for the economy in 2020, arguing that it would take a long time to reverse the damage caused by the 17-month trade war on sectors like manufacturing and agriculture. Restaurants posted a 0.3% drop, also the largest in nearly a year.