Retail Sales Up Less Than Expected In November

Date: December 14, 2016

But Increase From One Year Ago Could Portend Strong Holiday Sales

The Commerce Department says in a new report that retail sales rose 0.1 percent in November. Bloomberg News reports economists had expected an increase of 0.3 percent increase. Core retail sales, which exclude food services, auto dealers, home improve stores, and gas stations because of volatility, were up 0.1 percent. Bloomberg adds the figures “interrupt a trend of steady spending by consumers.” However, the Wall Street Journal notes, sales were up 3.8 percent on an annual basis. Gus Faucher, PNC Financial Services Group economist, said the holiday spending season is “off to a solid start,” adding, “However, gains for traditional retailers will be much weaker due to the increasing reach of online sales.” Reuters reports a key factor in the lackluster monthly data was reduced purchases of automobiles. The “softer-than-expected retail sales numbers last month suggest some cooling in consumer spending in the fourth quarter after solid gains in the July-September period. Still, consumers should continue to support economic growth in the fourth quarter.”

What This Means For Small Business

The latest retail spending report is mixed news for small business owners. The monthly gain is disappointing, but the report, in conjunction with the ongoing strength in the labor markets and growing economic optimism, also raises prospects for strong consumer spending for the holidays.

Additional Reading

MarketWatch also covers the story.

Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.

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