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November 2010 Retail Sales Figures rose more than expected in November, boosting hopes that the all-important consumer sector will support the fragile recovery.
The government's report came as a surprise because the nation's retailers have been reporting generally lackluster results for the start of the holiday shopping season and consumer spending accounts for 70% of overall economic activity.
But retail sales rose 1.3% last month, after a 1.1% October gain, the Commerce Department said Friday. It was the biggest advance since sales jumped 2.4% in August, and more than double the 0.6% increase economists had expected.
Excluding autos, retail sales rose 1.2%, triple the 0.4% advance economists expected.
A 6% surge in sales at service stations, partly reflecting higher gasoline prices, led the overall gain. But even excluding that jump, retail sales posted a respectable 0.8% rise in November.
Economists' general view has been that double-digit unemployment levels would keep consumers cautious in their spending and act as a drag on the economy as it struggles to emerge from the worst recession since the 1930s.
The November retail sales report showed that auto sales rose 1.6%, a solid performance after a 7.1% surge in October.
Sales at department stores increased 0.7%, and the broader category that includes big retailers such as Wal-Mart Stores Inc. and Target Corp. posted a 0.8% increase.
Sales also jumped 2.8% at electronics and appliance stores, and 1.5% at hardware stores.
Sales did fall 0.7% at furniture stores, something of a surprise since analysts had expected the recent rebound in home sales to bolster demand for furniture.
After posting two straight gains following more than a year of declines, big chain retail stores earlier this month reported a dip in November sales. Those figures don't include Wal-Mart, the world's largest retailer, which no longer reports monthly sales.
But a diverse group of stores, including Macy's Inc., Saks Inc., Abercrombie & Fitch Co. and Target, did post sharper-than-expected sales declines in November.
The overall economy rose at an annual rate of 2.8% in the July-September quarter, the first increase after a record four straight declines. Analysts had forecast growth to sag a bit in the current quarter and the first half of 2010 because they expected consumer spending would weaken under the weight of 10% unemployment.
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