Posted: Tue Dec 13, 2011 10:06 pm Post subject: Retail Sales in U.S. Climbed Less Than Forecast
U.S. retail sales rose in November at the slowest pace in five months, indicating faster job growth may be needed to spark the biggest part of the economy.
The 0.2 percent gain in sales followed a 0.6 percent advance in October that was more than initially reported, Commerce Department figures showed today in Washington. Economists projected a 0.6 percent November increase, according to the median forecast in a Bloomberg News survey. Purchases excluding automobiles also rose 0.2 percent.
Retailers like J.C. Penney Co. and Gap Inc. (GPS) are relying on discounts to drum up sales as the labor market and incomes struggle to strengthen. To maintain spending, consumers have had to draw savings down to the lowest level in four years.
“Sales are growing, but they just aren’t accelerating,” said Ryan Wang, an economist at HSBC Securities USA Inc. in New York. “There have been some real slight hints of improvement in the labor market, but until we get sustained growth in income, spending is going to be moderate.”
Retail sales were projected to pick up after rising a previously reported 0.5 percent in October, according to the Bloomberg survey. The 83 economists’ estimates ranged from advances of 0.2 percent to 1.1 percent.
The Standard & Poor’s 500 Index rose 0.8 percent to 1,246.16 at 9:33 a.m. in New York as global equities rallied after Spain sold more debt than planned at an auction. The yield on the benchmark 10-year Treasury note climbed to 2.06 percent from 2.01 percent late yesterday.
Federal Reserve
The November gain was the smallest since a similar rise in June. Federal Reserve policy makers meeting today will probably revise their pledge to keep interest rates close to zero through mid-2013, according to economists in a Bloomberg survey.
The Fed will alter the interest rate commitment before June, according to 64 percent of economists surveyed, with 51 percent saying the central bank will abandon the option of a third round of buying bonds, or so-called QE3. Chairman Ben S. Bernanke and his policy-making colleagues will reflect on an economy that has strengthened since their November meeting.
Sales excluding automobiles and service stations increased 0.2 percent, less than the projected gain of 0.4 percent, today’s report showed.
Seven of 13 major categories showed gains last month, led by a 2.1 percent jump at electronics and appliance stores.
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