Dive Brief:
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Overall retail sales rose 0.2% in November, missing forecasts of closer to 0.3%, but by the most in four months, according to the U.S. Department of Commerce. There were no revisions to data from September or October.
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And excluding sales of autos and gasoline, overall retail sales in November increased 0.5%, slightly beating expectations of a 0.4% rise.
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Sales grew 0.6% at electronics and appliance stores, 0.8% at apparel stores, 0.7% at general retailers, 0.8% at sporting good retailers, and 0.6% for e-commerce retailers. Furniture stores, which had seen increases in recent months, saw a 0.3% decrease in sales.
Dive Insight:
An improving economy, most notably a rise in employment, and continuing low fuel prices have helped bring some robustness to retail sales.
November’s sales increase remains modest, but bodes well for retailers generally and makes a hike in the Federal Reserve's overnight prime interest rate more likely.
But retailers aren’t likely singing “Joy to the World” any time soon. Stagnant wages remain a problem, as does the relative health of the middle-class consumer. A study released this week by the Pew Research Center found that the middle class in the U.S. is “no longer the majority and falling behind financially.”
“In early 2015, 120.8 million adults were in middle-income households, compared with 121.3 million in lower- and upper-income households combined, a demographic shift that could signal a tipping point,” according to the center’s analysis of government data.
Meanwhile high inventory levels and muted sales after the big Black Friday shopping weekend are expected to lead to major discounts as Christmas approaches, which could lift sales but hit margins.