WASHINGTON: US consumer spending gathered momentum in November as households bought furniture, electronics and a range of other goods, which could further allay fears of a significant slowdown in the economy.
The upbeat data from the Commerce Department on Friday bolstered expectations that the Federal Reserve will raise interest rates at its Dec. 18-19 policy meeting, despite moderating inflation and tighter financial market conditions.
The US central bank has hiked rates three times this year.
Retail sales excluding automobiles, gasoline, building materials and food services surged 0.9 percent last month after an upwardly revised 0.7 percent increase in October.
These so-called core retail sales, which correspond most closely with the consumer spending component of gross domestic product, were previously reported to have gained 0.3 percent in October. Economists polled by Reuters had forecast core retail sales rising 0.4 percent last month.
November's increase in core retail sales and upward revisions to October's data suggested a brisk pace of consumer spending in the fourth quarter. Consumer spending, which accounts for more than two-thirds of the US economy, increased at a 3.6 percent annualized rate in the July-September quarter.
A sharp sell-off on Wall Street and partial inversion of the US Treasury yield curve had stoked fears of a recession. But worries over the economy's health were eased on Thursday after government data showed the number of Americans seeking unemployment benefits fell back to a near 49-year low last week.
Gross domestic product estimates for the fourth quarter are around a 2.4 percent rate. The economy grew a 3.5 percent pace in the July-September period. Spending is being boosted by a tightening labor market, which is starting to spur faster wage growth, lower taxes and moderate inflation.
The dollar rose against the euro and the yen after the core retail sales data, while US Treasury prices trimmed gains. US stock index futures were trading lower.
Overall retail sales, however, rose only 0.2 percent in November as cheaper gasoline undercut sales at service stations. Gasoline prices have dropped about 40 cents per gallon since October, according to the US Energy Information Administration.
Oil prices have fallen by a third since the start of October amid concerns about oversupply and a slowing global economy.
Retail sales increased by an upwardly revised 1.1 percent in October. They were previously reported to have surged 0.8 percent.
Sales at service stations tumbled 2.3 percent last month, the biggest drop since May 2017, after rising 3.2 percent in October. Auto sales gained 0.2 percent after accelerating 1.5 percent in the prior month.
Sales at building material stores slipped 0.3 percent. Receipts at clothing stores dropped 0.2 percent after jumping 1.3 percent in October. The drop in clothing sales probably reflects deep discounting by retailers seeking to lure shoppers.
Online and mail-order retail sales surged 2.3 percent, the largest gain in a year, after increasing 0.8 percent in October.
Receipts at furniture stores rebounded 1.2 percent. Sales at electronics and appliance stores increased 1.4 percent. Spending at hobby, musical instrument and book stores increased 0.4 percent. But sales at restaurants and bars fell 0.5 percent after rising 0.6 percent in October.
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