Spending Rises 0.8% in October; Home Sales Continue Strong

Although holiday shoppers appear willing to loosen their purse strings this year, November retail sales figures, released Thursday, show they are shunning flash and frivolity for price and practicality.

Also, consumer spending rose a healthy 0.8% in October, and the number of new claims for unemployment benefits dipped in the most recent week reported, the government said Thursday--both providing further evidence that the economy is expanding at the start of the busy holiday shopping season.

Two other reports said new-home sales in Southern California and the rest of the United States cooled off from the sizzling pace measured in September, but remained well above year-ago levels.

The 0.8% increase in consumer spending in October--the biggest monthly gain since May--was fueled by a 0.6% advance in personal income, the Commerce Department said.

The report came on the same day several of the nation’s retailers announced mixed sales results for November. The retailers offering the best values reported the strongest sales gains. These included J.C. Penney Co., Sears, Roebuck & Co. and Wal-Mart Stores Inc. By contrast, stores that carry less essential items, such as fashion outlets The Limited Inc. and Merry-Go-Round, rang up weak sales.

Meanwhile, La Jolla-based Dataquick Information Systems said new home sales in Southern California dropped 9% from their torrid September levels but were still nearly twice as many as a year ago.

About 4,600 new houses were sold in the six counties of Southern California in October. The total was down from 5,105 sold in September but up 90% from the anemic 2,450 sales of October, 1992. September was the best month for sales since the boom days of the late 1980s.

“There’s no reason for builders to panic, because everybody knew that the September sales rate was going to be impossible to maintain,” said Dataquick analyst John Karevoll. “Southern California’s housing market isn’t booming, but it is certainly recovering.”

Meanwhile, the Commerce Department said sales of new homes nationwide fell 6.5% in October from September but were up 6.6% from a year earlier. September was the best month for home sales nationwide in nearly four years.

The Labor Department said initial filings for unemployment pay declined by 17,000 last week, to the lowest level in two months.

Analysts had anticipated a slight dip because unemployment offices were closed on Thanksgiving Day, but last week’s drop was about twice what had been expected.

The four-week average number of jobless claims, the gauge preferred by analysts, fell by 4,250 to 338,750.