November retail sales were up 0.2% in the month, slightly above analysts’ projections for a 0.1% gain, but well below the 0.9% gain expected by markets, according to a report released by the Commerce Department Friday.
The modest headline gain hides significant underlying strength when a large gasoline station drop is removed. October sales were revised up to a 1.1% gain.
Excluding a 0.2% gain in motor vehicle sales, retail sales were still up 0.2% in November, compared with the 0.1% gain expected and following an upward revision to October.
November sales were up 0.5% ex. motor vehicle and gas, only slightly behind the 0.7% October gain, and were up 0.9% for the “control” group (ex auto, building materials, gas and food services), stronger than the 0.7% rise in October. The data suggest that the underlying current of sales remained strong in November.
Gas station sales fell 2.3% in the month (retail sales ex. gas +0.5%), while building materials sales were down 0.3% and food services sales were down 0.5%.
There were gains in every other component except for clothing, with a sharp 2.3% rise in sales at non-store retailer, suggesting a strong Black Friday performance.
Building materials sales are likely to rise sharply in the coming months as rebuilding efforts in the hurricane-impacted areas increase.
Fourth quarter sales were up 4.3% vs the third quarter average, based on an MNI calculation. Sales were up 3.9% ex motor vehicles, and up 4.6% ex autos, building materials, gas, and food services.
The data suggest that PCE growth remained strong to end the year.
Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.