US retail sales rise

US retail sales grew less than forecast in November, tempering some of the expectations for a strong holiday season that had been raised by signs of bumper Thanksgiving weekend sales. Total retail sales increased 0.2 percent after rising by an upwardly revised 0.6 percent in October, as less spending on food and beverages weighed against stronger auto sales, the Commerce Department said on Tuesday.
"It's fairly disappointing given that all the evidence was pointing to fairly strong gains during the month," said Millan Mulraine a macro strategist at TD Securities in New York. Shoppers swarmed in to stores over the Thanksgiving weekend, traditionally retail's biggest sales period. Positive sales reports over that weekend led some analysts to predict a strong overall season.
However, many economists have warned the shopping frenzy may not carry through the holidays due to the nation's still high unemployment rate of 8.6 percent. Consumer spending, which accounts for more than two-thirds of US economic activity, rose sharply in the third quarter but November's retail sales growth was the weakest in any month since June. Americans have scaled back on saving this year, freeing up money for spending, but economists say that trend was not sustainable.
One retailer that felt the pinch from heavy discounts was Best Buy Co's, the world's largest electronics chain. The firm on Tuesday reported a fall in third-quarter profits. Its shares dropped more than 10 percent. Small businesses in the United States grew more confident in the economy's future in November, for a third straight month of improvement, bolstered by a more optimistic outlook for sales and hiring, according to a separate report released on Tuesday.
The National Federation of Independent Business said its Small Business Optimism Index rose 1.8 points to 92.0. Within the retail sales report, receipts for motor vehicles and parts fuelled the overall increase, rising 0.5 percent. Excluding autos, retail sales rose 0.2 percent after advancing 0.6 percent in October.
But sales at food and beverage stores fell 0.2 percent in November. Also holding back the overall gain in sales, receipts at gasoline stations dropped 0.1 percent last month after slipping 0.4 percent in October. Core retail sales, which exclude autos, gasoline and building materials, rose 0.3 percent in November after advancing 0.7 percent the prior month.