USA retail sales increased more than expected in November as the holiday shopping season got off to a brisk start, pointing to sustained strength in the economy that could pave the way for further Federal Reserve interest rate hikes next year.
The US Commerce Department reported retail sales to be 0.8% higher in November, easily surpassing forecasts of 0.3%. The stronger than expected retail sales growth came despite a modest decrease in sales by motor vehicle and parts dealers, which edged down by 0.2 percent in November after jumping by 1.2 percent in October.
The report showed significant increases in sales by gas stations, non-store retailers and electronic and appliance stores.
The upbeat retail sales data suggest that the USA economy is on track for robust growth in the fourth quarter of the year, as consumer spending accounts for about two thirds of the whole economy.
Excluding the drop in auto sales, retail sales surged up by 1.0% in November after climbing by 0.4% in October. Ex-auto sales had been expected to climb by 0.6 percent.
The newspaper also said that "high inventories and a slowdown in purchases by worldwide tourists amid a rising dollar" contributed to a poor holiday season for retailers previous year.
"This has been an impressive start to the holiday season, perhaps the best in the last few years", Jack Kleinhenz of the National Retail Foundation said in a statement.
Last week marked the 145th straight week that claims remained below the 300,000 threshold, which is associated with a strong labor market. The economy added 228,000 jobs in November. Receipts at clothing stores rose 0.7 percent in November. Receipts at restaurants and bars gained 0.7 percent and sales at sporting goods and hobby stores shot up 0.9 percent.
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