Holiday Shopping, Storm Rebuild Boost Retail Sales in November

By Mark Lieberman

Managing Director and Senior Economist


  • November retail sales – measured by prices – ROSE $3.9 billion or 0.8 percent from October when they were UP $2.7 billion or 0.5 percent (revised from the originally reported 0.2 percent increase);
  • Every category of sales, except auto, saw an increase in November; Auto was off 0.2 percent from October;
  • Gasoline station sales increased 2.8 percent due in large measure to a 2.4 percent increase in the per gallon price of gasoline from $2.505 to $2.564.
  • Year-year total sales ROSE 5,5 percent in November compared with a 4.8 percent year-year growth in October

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Boosted by Black Friday and Cyber Monday promotions, retail sales measured by prices rose sharply in November with the second largest month-month gain of the year, the Census Bureau  reported Thursday.

Sales at non-store retailers – online sales – led the charge with a 2.3 percent month-month gain in November, the largest since July 2015 when son-store retail sales grew 2.7 percent.

Sales at electronics and appliance stores rose 2.1 percent in November, a combination of holiday shopping and rebuilding in the aftermath of hurricanes Irma and Harvey. Rebuilding efforts because of the storms also boosted sales at building material and garden supply stores and at furniture and home furnishing stores Sales were up month-month 12. Percent in each category. The historic average monthly growth in sales at furniture and home furnishing stores had been 0.3 percent and at building and garden supply stores 0.4 percent.

Not all the increases are necessarily the result of volume. Though billed as a retail sales report, the Census release notes sales are not adjusted for inflation which makes it more a reflection of prices than consumer activity. But with retailers offering their usual Black Friday sales and discounts, the increase in retail activity means consumer spending is up, a positive for Gross Domestic Product. Retail sales represent about 55 percent of consumer spending which itself is about 67 percent of GDP.

The increases in activity by store category generally followed the increase in retail employment in November with a couple of exceptions. Jobs at non-store retailers and electronics and appliance stores each decline in November, even as sales at those store categories increased.

The improvement in retail activity knocks another support from the rationale offered for the massive tax cut which is closing in on Congressional passage. According to data compiled by Business Insider the top 20 percent of earners save almost 24 percent of their income (the top 1 percent save 51 percent of their income) suggesting a tax cut aimed at higher income earners will not provide a boost to the economy.

That said, the Federal Reserve, in announcing its increase in the target fed funds rate Wednesday, provided only a lukewarm endorsement of the tax cut in terms of its boost to the economy.

Hear Mark Lieberman on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124, every Friday at 6:20 am Eastern Time. You can follow him on Twitter at @foxeconomics.  

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