U.S. retail sales rose slightly in November as the holiday shopping season began briskly, the government reported Friday, suggesting enough momentum in the economy for the Federal Reserve (Fed) to raise interest rates next week for the first time in almost a decade.
The Commerce Department said retail sales rose 0.2 percent in November as automobile sales fell and cheaper gasoline hurt service stations. Retail sales rose 0.1 percent in October.
Auto sales fell 0.4 percent last month, the biggest decline since June, after falling 0.3 percent in October. While automakers reported strong sales last month, the units sold were slightly below October levels.
Sales at gasoline stations fell 0.8 percent in November after dropping 1 percent the previous month. Sales at clothing stores jumped 0.8 percent, the largest increase since May. Sales at online retailers rose 0.6 percent, as did sales at electronics and appliance stores.
Retail sales excluding automobiles, gasoline, building materials, and food servicesincreased a strong 0.6 percent in November after a 0.2 percent advance the previous month. Such “core” retail sales correspond most closely with the consumer-spending component of gross domestic product (GDP).
Consumer spending, which accounts for 70 percent of U.S. economic activity, slowed unexpectedly in October and September. The moderation came despite an improving labor market, which has begun to lift household income.
The latest signs of strength in consumption support expectations the Fed will raise its key interest rate from near zero when policymakers conclude a two-day meeting next Wednesday. The U.S. central bank has not lifted rates since June 2006.