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US retail sales cool in November after strong gains
[WASHINGTON] US retail sales barely rose in November as households cut back on purchases of motor vehicles, suggesting some loss of momentum in economic growth in the fourth quarter.
The Commerce Department said on Wednesday retail sales edged up 0.1 per cent after two straight months of strong gains. October retail sales were revised downward to show a 0.6 per cent increase instead of the previously reported 0.8 per cent rise.
Sales were up 3.8 per cent from a year ago. Excluding automobiles, gasoline, building materials and food services, retail sales also nudged up 0.1 per cent last month after a downwardly revised 0.6 per cent increase in October.
These so-called core retail sales, which correspond most closely with the consumer spending component of gross domestic product, were previously reported to have advanced 0.8 per cent in October.
Economists had forecast overall retail sales increasing 0.3 per cent and core sales also gaining 0.3 per cent last month.
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.
Data on the labour market, manufacturing and housing have offered a fairly upbeat view of the economy early in the fourth quarter. That, together with signs that inflation is perking up, are expected to encourage the Federal Reserve to raise interest rates later on Wednesday.
The US central bank hiked its overnight benchmark interest rate last December for the first time in nearly a decade.
The Atlanta Fed is forecasting gross domestic product rising at a 2.6 per cent annualised rate in the fourth quarter. The economy grew at a 3.2 per cent pace in the third quarter.
Last month, auto sales fell 0.5 per cent, the largest decline since March, after increasing 0.5 per cent in October. Sales at building material stores rose 0.3 per cent.
Receipts at clothing stores were flat, suggesting a weak start to the holiday shopping season. Department stores like Macy's and Kohl's are facing intense competition from online retailers such as Amazon, which have snatched a large chunk of the market share.
Sales at online retailers gained 0.1 per cent last month after surging 1.4 per cent in October. Receipts at restaurants and bars increased 0.8 per cent, while sales at sporting goods and hobby stores fell 1.0 per cent.
Receipts at service stations gained 0.3 per cent after jumping 2.5 per cent in October. That reflected falling gasoline prices.