Retail Sales Rebound Modest 1.1% : Yule Buying Expected to Be Slow Despite November Gain

Retail sales rose 1.1% during November, rebounding from the steepest one-month decline on record during October, the Commerce Department reported today.

But analysts said the modest increase suggests a very sluggish Christmas shopping season. They noted that consumers have taken on high levels of debt and kept their savings low, meaning spending will show little growth.

The nation’s retailers did business worth $115.9 billion during November, as nearly all categories of goods showed some increases in sales.

“The November sales show the Christmas shopping season has gotten off to a slow start,” said economist Sandra Shaber of the Chase Econometrics forecasting firm. “We don’t think it’s going to pick up that much. Consumers are deeply in debt, saving very little, price-sensitive and very cautious.”

Overall, Shaber saw “very little” in the economy that might improve consumer spending, in terms of employment growth or gains in income. “Consumer spending is very sluggish and certainly cannot provide any boost for the economy,” she said.

Consumer spending contributes about two-thirds of the gross national product, which the Reagan Administration hopes will grow 5% to 6% during the fourth quarter.

But most economists are nowhere near that optimistic. “There’s only a little bit of life out there,” said Shaber, whose firm is forecasting growth of 2% in the final quarter of this year.

The November report contrasted sharply with the record plunge in sales reported for October, which the Commerce Department revised downward in its report today to a 4.2% decline.

Much of that decrease was the result of a record 17.2% drop in auto sales as consumers put the skids on a two-month car-buying spree spurred by incentives and attractive financing on end-of-the-year 1985 models.

So far this year, retail sales are running 6.5% ahead of sales during the first 11 months of 1984. Sales during 1984 were 9.4% higher than 1983 sales.