U.S. Retail Sales Probably Rose for Third Time in Four Months
Dec. 11 (Bloomberg) -- Sales at U.S. retailers probably rose in November for the third time in the past four months, a sign consumers are joining the emerging recovery, economists said before a government report today.
Purchases climbed 0.6 percent after a 1.4 percent October gain, according to the median estimate of 79 economists surveyed by Bloomberg News. Other reports may show sentiment climbed this month and import prices increased in November.
Households have kept buying automobiles even after government incentives expired, showing the biggest part of the economy was weathering the worst employment slump in the postwar era. The Obama administration is proposing new initiatives in a bid to create jobs, while Best Buy Inc. is among retailers using discounts to lure budget-conscious holiday shoppers.
“The stimulus has provided a prop to household income, and that’s enabled spending to be higher,” said David Resler, chief economist at Nomura Securities International Inc. in New York. “One would give the stimulus some credit for keeping the economy from getting worse.”
The Commerce Department’s sales report is due at 8:30 a.m. in Washington. Forecasts ranged from a decline of 0.8 percent to a gain of 1.3 percent.
General Motors Co., Toyota Motor Corp., Ford Motor Co. and Chrysler Group LLC all posted November sales that beat analysts’ estimates. The seasonally adjusted sales rate was 10.9 million vehicles, up from 10.45 million in October, according to industry figures released last week.
Auto Sales
Auto sales climbed back during the past two months after plunging in September, the month after the government’s “cash- for-clunkers” plan expired.
Excluding automobiles, sales probably rose 0.4 percent after a 0.2 percent increase the prior month, according to the Bloomberg survey.
The data aren’t adjusted for inflation so an increase in gasoline prices probably helped push up service station receipts, contributing to the projected gain. The average cost of a gallon of the fuel at the pump was $2.65 last month, up 9 cents from October, according to figures from AAA, the nation’s biggest motoring organization.
Signs the deterioration in the labor market is abating may help restore confidence and boost spending. A Labor Department report last week showed the economy lost 11,000 jobs in November, the smallest decline since the start of the recession in December 2007.
Price Cuts
Americans are responding to price cuts. Sales on Black Friday and the weekend after the Thanksgiving holiday advanced 0.5 percent as discounts on electronics and toys drew crowds, according to the National Retail Federation.
Best Buy, the biggest electronics chain, used $547.99 42- inch Samsung flat-panel TVs to lure shoppers. The retailer had bigger early morning crowds than last year, said Brian Dunn, chief executive officer and president of the Eden Prairie, Minnesota-based company. He said shoppers would continue to see discounted pricing into the holidays.
“You’re going to see great values throughout the holiday selling season,” he said in an interview with Bloomberg Television on Nov. 27.
TJX Corporation Inc. reported sales up 15 percent in the four weeks ended Nov. 28 from a year earlier. The operator of T.J. Maxx and other low-priced apparel retailers forecasts strong sales through the end of the year.
Gaining Confidence
“We are confident in our momentum,” said Carol Meyrowitz, chief executive officer of TJX, said in a statement on Dec. 3.
Consumers may be turning less pessimistic. The Reuters/University of Michigan preliminary index of consumer sentiment for December probably rose to 68.8 from a final reading of 67.4 a month earlier, according to the survey median. The data are due at about 10 a.m.
Consumer spending will probably climb at a 1.7 percent annual rate this quarter, more than anticipated in November, according to the median estimate of economists surveyed this month. The world’s largest economy will expand at a 3 percent pace after growing 2.8 percent in the third quarter, the survey showed.
The global recovery is boosting world trade, pushing up the costs of imports. Cost of imported goods increased by 1.2 percent, according to the median estimate of economists surveyed before a Labor Department report at 8:30 a.m.
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