Retail sales made a moderate comeback in November despite a drop in gasoline prices. Autos were up as well as the key core component. Total retail sales in November rebounded 0.3 percent, following a 0.3 percent decline the prior month (originally down 0.3 percent). Analysts projected a 0.6 percent jump for the latest month.
Motor vehicle sales rebounded 1.4 percent after a 1.9 percent decrease in October. Ex-auto sales were unchanged, following a flat figure for October (originally unchanged). Market expectations were for no change in November.
Gasoline sales dropped 4.0 percent in November, following a 1.0 percent rise the prior month. Excluding both autos and gasoline components, sales gained a healthy 0.7 percent, following a 0.1 percent decline in October (originally down 0.3 percent).
Core components were mostly positive with some subcomponents notably strong. Leading the sales less autos and less gasoline component were nonstore retailers, up 3.0 percent; electronics & appliance stores, up 2.5 percent, and building materials & garden equipment, up 1.6 percent. Also gaining were furniture & home furnishings, health & personal care, clothing, sporting goods & hobby & books, miscellaneous store retailers, and food services & drinking places.
On the downside within the core, general merchandise fell 0.9 percent while food & beverage stores declined 0.3 percent.
Even though the headline number fell short of expectations due to a sharp drop in gasoline prices, the report is actually notably favorable. Auto sales were up and sales excluding autos and excluding gasoline were quite healthy. It looks like retailers (except department stores) are doing well this holiday season. Economists are likely to nudge up their forecasts for fourth quarter GDP.
Market Consensus before announcement
Retail sales in October were likely affected by Hurricane Sandy. Total retail sales in October declined 0.3 percent after jumping 1.3 percent the month before. Motor vehicle sales dipped 1.5 percent after a 1.7 percent boost in September. Ex-auto sales were unchanged, following a rise of 1.2 percent in September. Gasoline sales advanced 1.4 percent in October, following a 2.5 percent spike the prior month. Excluding both autos and gasoline components, sales dropped 0.3 percent, following a 1.0 percent boost in September (originally up 0.9 percent). Core components showed broad softening.