In November, U.S. retail sales were higher than anticipated as the holiday shopping commenced, indicating supported strength in the economy that lead to additional Federal Reserve interest rate hikes in 2018. The economic outlook was also boosted by Thursday’s data which revealed the number of Americans filing for unemployment benefits last week fell to a near 44-1/2-year low.
The Commerce Department reported that retail sales increased by 0.8 percent in November, while data for October was revised to report sales growing 0.5 percent rather than the 0.2 percent increase previously reported.
Retail sales improved 5.8 percent on an annual basis. November’s sales at gardening and building material stores rose 1.2 percent after the dip of 0.1 percent in the previous month. Retail sales were also boosted by a 2.8 percent gain in sales at service stations from higher gasoline prices. Excluding automobiles, gasoline, building materials and food services, retail sales rose by 0.8 percent in November following October’s gain of 0.4 percent.
In a separate report, the Labor Department revealed that unemployment benefits fell by 11,000 to a seasonally adjusted 225,000 for the week ending Dec. 9. This was the lowest reading since mid-October when claims fell to 223,000, a level not seen since 1973.
Last week celebrated the 145th straight week that claims were below the 300,000 threshold, which is connected to a healthy labor market. Fed Chair Janet Yellen stated that the central bank anticipates the “labor market to remain strong, with sustained job creation, ample opportunities for workers, and rising wages.”
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Consumer spending increased by a 2.3 percent annualized rate during the third quarter, adding to the economy’s 3.3 percent growth pace. November’s sales at electronics and appliance stores rose 2.1 percent, while clothing stores increased by 0.7 percent. Retailers, including Macy’s Inc, reported solid Black Friday sales, which is the traditional start of the holiday retail season. Sales at online retailers increased 2.5 and restaurants and bars gained 0.7 percent.