"Increased consumer activity in November is a welcome sign for retailers who have adjusted promotions, pricing and product assortment to appeal to consumers in search of the best value," said Casey Chroust, executive vice president for retail operations. "Although consumers are spending less per visit, increased store traffic is driving higher overall sales."
Sales increased in most retail categories in November. General merchandise stores such as department stores and discounters recorded their fourth straight monthly gain, with similar improvements for electronics and appliance retailers. Building material sales had their strongest month in more than a year, reflecting the nascent recovery in housing. Those areas of strength were partly offset, however, by a drop in clothing sales and ongoing continued decline in sales of furniture and home furnishings.
A broad measure of "core" retail sales that tracks the underlying strength of retail sales to families increased 0.5 percent in November, its fourth consecutive monthly gain. Core sales exclude volatile spending on autos and gasoline as well as sales of building materials that are mainly purchased by contractors.
The strength of today's retail sales figures mirror last week's jobs report for November, which showed an economy that is stabilizing and moving toward recovery. The unemployment rate ticking down in November and job losses much smaller than expected. Other indicators likewise point toward a rebound: initial claims for unemployment insurance are down substantially from earlier in the fall, wages and household incomes were up in October and November, and household wealth has recovered with gains in stock values since the spring. Housing market indicators such as sales and home prices have stabilized, and forward-looking surveys of purchasing managers suggest that firms in both manufacturing and service industries see a better business climate ahead.
"Today's data were a welcome sign that consumers are gaining comfort and opening their wallets," said Donald B. Marron, visiting professor at the Georgetown Public Policy Institute and RILA outside economist. "We still have a long way to go to recover from the sharp declines in spending and employment over the financial crisis, but a wide variety of indicators point to a U.S. economy that is on the mend."
The retail industry, which greets millions of customers in their stores every day, knows full well the challenges consumers are facing in this economy. As the employer of nearly 15 million Americans, the retail industry also knows the effect that costly and burdensome regulations have on job creation and job retention.
"With so many American's out of work and many more worried about their jobs, policymakers intent on stimulating job growth and the economy must focus on reducing the challenges employers face rather than erecting new barriers to job creation - such as those contained in health care reform legislation. Congress simply should not pursue major initiatives that could add significantly to the cost and regulatory burdens faced by employers, specifically the retail industry, thus providing a disincentive to the hiring and business investment critical to ongoing economic recovery efforts," concluded Chroust.
