November sales surge, fueling holiday retail
Retail trade sales (excluding restaurants, motor vehicles and gasoline stations) in November rose 0.3% from last month and 4% year over year, the U.S. Department of Commerce said on Friday. Sales at nonstore retailers (mostly e-commerce) rose 2.3% from October and 10.8% year over year, according to the report.
The National Retail Federation used Friday's numbers for its own report and said the month's sales back up its holiday sales forecast for growth between 4.3%-4.8% year over year to between $717.4 billion and $720.8 billion. November retail sales were up 0.7% seasonally adjusted from October and increased 5% unadjusted from 2017, the NRF said in a press release emailed to Retail Dive.
Consumers spent most lavishly on furniture (sales grew 1.2% from last month and 1.7% year over year) and electronics (1.4% from October and 4% year over year), the government said. Sporting goods, booksellers and hobby stores grew 0.4% from October but toppled 8.8% from last year, while department store sales grew 0.4% from October but edged down 0.2% from last year, according to the federal report.
The holidays are on track, and retailers should enjoy things while they can.
As with NRF, Wells Fargo analysts on Friday also said the morning's numbers supported their own 4.5% holiday boost forecast, but warned that the horizon doesn't look so rosy. "We'd need to see a December increase of 0.3% in holiday-related outlays to hit our target," Wells Fargo Senior Economist Tim Quinlan wrote in comments emailed to Retail Dive. "Further out, we're less sanguine on the consumer. Come January, the holiday bills come due, and as we hit the anniversary of tax cuts, the year-to-year comps get tougher."
Consumer confidence may already be running into trouble. The percentage of Americans who see the economy as "excellent or good" dropped eight points to 50% percent, according to CNBC's most recent All-America Economic report. Just 31% think it will improve, a five-point drop, according to the survey of 802 Americans conducted Dec. 3-6, which was emailed to Retail Dive. That's the biggest quarterly nosedive in the survey's 12-year history.
But wage gains from this year, plus lower gas prices, appear to be fueling holiday spending nevertheless, according to the report. Americans' spending plans for the season on average topped $1,100, the first time the survey notched an average above $1,000. It helps that, while ebbing, public sentiment around the economy remains good — in fact the survey's fourth highest ever.
For now consumer spending "remains solid," according to NRF Chief Economist Jack Kleinhenz, who kept his emphasis on the economy, saying that it's "healthy as we head into 2019."
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