WASHINGTON >> U.S. retail sales increased a slight 0.2% in November, as strong sales tied to holiday shopping were offset by lower gasoline prices.
Excluding gas, however, the Commerce Department said today that last month’s retail sales rose a healthy 0.5% in a positive sign for economic growth.
Retail sales have climbed a solid 5.3% so far this year. In November, non-store retail sales — a category that includes Internet brands such as Amazon — jumped 2.3%. Furniture stores, electronics stores and health stores also enjoyed a solid bump as the holiday shopping season went into full swing.
“U.S. consumers were feeling festive a month before the holidays!” said Jennifer Lee, a senior economist at BMO Capital Markets.
Americans have responded to an improvement in economic growth this year by spending more, especially online and at restaurants. Retail sales are an indicator that Americans have faith that the economy with a half-century low unemployment rate of 3.7 percent will continue to grow. Yet the economic gains of the past year — buoyed by President Donald Trump’s deficit-financed tax cuts — have not insulated retailers from broader long-term pressures. Sales at department stores have slipped compared with last year, while sales gains for automakers have been weak. General Motors recently announced layoffs for thousands of workers.
In November, gas stations trimmed retail sales. Service stations had a 2.3% drop in purchases last month. This was a reversal from October when higher gas prices, along with a short-lived bump in auto-buying, had helped propel broader retail sales gains of 1.1%.
The average U.S. price of regular-grade gasoline has plummeted 22 cents a gallon over the past three weeks, to $2.51.
Those lower gas prices may have led Americans to spend more on themselves, or friends and family.
“The kick from the tax cuts is gone, but the huge and rapid drop in retail gas prices is freeing a great deal of cash at just the right time for retailers,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Besides non-store retailers, the gains were fueled by a 1.2% increase in purchases at furniture stores and a 1.4% growth in sales at electronics and appliance stores.
Core sales, which exclude autos, gas and building materials, have increased over the past two months at the fastest pace in two years, a reassuring sign for economic growth coming into the end of 2018.