US shoppers give the cold shoulder to November
Overall volumes ended up with only a marginal boost than was expected
Los Angeles
US consumers gave retailers only a modest boost in November, showing a reluctance to spend that could signal ill tidings for the crucial holiday season.
Last month, retail sales climbed to $465.5 billion (Dh1.71 trillion), up 0.1 per cent from October and up 3.8 per cent from November 2015, the US Commerce Department said. Some forecasts had predicted a rise of at least 0.3 per cent.
“This holiday season may turn out to be below par or not as healthy as what we expected,” said Sung Won Sohn, an economist at Cal State Channel Islands. “I am bracing for a small disappointment.”
Sohn said that many economists were predicting a more robust November after strong growth in the previous two months. However, October retail sales were also revised down to 0.6 per cent from an original estimate of 0.8 per cent, indicating that it was not as strong as previously thought, he said.
Retail sales in November can be a crucial barometer of consumer sentiment and retail performance for the overall season — a make-or-break period when retailers can sometimes rake in 40 per cent of their annual sales.
Shoppers have been hitting retailers during Thanksgiving and Black Friday, the traditional kickoff to the holiday season. More than 154 million shopped during the four-day weekend starting Turkey Day, up from 151 million a year ago, according to a survey from the National Retail Federation. However, average consumer spending dropped.
“Consumers are looking for deep discounts and price cuts,” said Lindsey M. Piegza, chief economist at Stifel Fixed Income. “More shoppers are out this season compared to 2015, but they are increasingly hunting for bargains.”
The lacklustre November was at odds with some recent forecasts that painted a more upbeat picture of the economy in the fourth quarter. Earlier this month, the Labor Department reported that 178,000 net jobs were added in November, while the unemployment rate fell three-tenths of a percentage point to 4.6 per cent — the lowest since 2007.
These positive economic signs prompted the Federal Reserve to raise its short-term interest rate for the first time in a year; it also plans to raise rates three times in 2017, up from a previous forecast of two. Although the economy is doing well overall, economists said that many consumers are still
November’s growth was dragged down by a 0.5 per cent decline for auto and other motor vehicle dealers. If that category is stripped out, overall retail sales grew 0.2 per cent.
In all, 10 out of 13 categories reported growth. Sales at electronics and appliance stores, always a popular category during Black Friday sales, grew 0.1 per cent. Furniture store sales were up 0.7 per cent.
Department stores, which have been struggling as shoppers increasingly turn online and to speciality boutiques, reported a 0.2 per cent drop.
— Los Angeles Times
