Retail sales increased in November, according to the Commerce Department, with increased purchases of automobiles and other goods.
Sales increased 0.7%, which was the largest gain in five months. Sales increased 0.6% in October. Economists had predicted, on average, about a 0.6% increase in November.
The amount of retail sales – $432.3 billion – is 4.7% higher than November 2012, according to the Commerce Department.
The positive numbers increased speculation that the Federal Reserve might ease its current program to stimulate the economy by buying more than $85 billion in bonds each month.
The retail sales numbers “should provide more confidence to the Fed that the economic recovery has emerged from the political-induced uncertainties of recent months essentially unscathed and reinforce the expectation for the recent improved performance in the data to be sustained,” Millan Mulraine, senior economist at TD Securities in New York, told Reuters.
Even after taking out automobile sales, food services, gasoline and building materials, sales still rose 0.5%. According to Reuters, the numbers convinced Barclays to raise its fourth quarter gross domestic product growth estimate by two-tenths of a percentage point, to a 2.2% annual rate.
In addition to increased consumer spending, the economy is improving due to solid employment gains and steady income increases, according to Reuters. Lower gasoline prices are also helping.
The gains came across a variety of areas. Automobile sales and automobile parts sales increased by 1.8%. Meanwhile, sales at electronics and appliance stores increased by 1.1% and furniture store sales increased 1.2%.
Gasoline sales, due to lower prices, fell 1.1% and clothing stores sales also tapered off, falling 0.2% after rising sharply, by 2.6%, in October.
“There are signs of an earlier pick-up in consumption that is also likely to be the heart and soul of a future growth acceleration, regardless of the debate on investment spending,” Alan Ruskin, Global Head of G-10 FX Strategy at Deutsche Bank Securities in New York, told Reuters.
