November Retail Sales Climb a Healthy 0.6%

Shoppers got the Christmas sales season off to a robust start, piling into retail stores in November as key wholesale prices fell in a virtually inflation-free economy, government reports showed Friday.

Sales at retail stores jumped surprisingly by 0.6% to a seasonally adjusted $229.4 billion last month, after an upwardly revised 1.2% jump in October, the Commerce Department said. Department store sales climbed 1.4% to $30.2 billion--the biggest increase since a 1.5% gain in February--after a slight 0.3% rise in October.

“The first month of serious holiday shopping got off to a rousing start,” economist David Orr of First Union Corp. in Charlotte, N.C., said, adding that he was pushing up his estimate for 1998 holiday sales to a 6.5% gain over 1997 instead of a 5.5% rise.

A separate report from the Labor Department said wholesale prices, measured by its producer price index, dropped 0.2% last month, reversing October’s 0.2% rise.

Food and energy--two key components of the wholesale price gauge--each fell in November. Lower worldwide demand for oil has cut import prices for U.S. plants and factories and in turn showed up in cheaper gasoline prices for consumers much of this year.

Consumer spending has been a mainstay of the long-running U.S. economic expansion, now approaching an eighth full year of unbroken growth since the last recession ended in March 1991.

However, consumers are less upbeat about their finances and economic prospects so far this month than they were in November, judging from a University of Michigan study.

The university’s preliminary index of consumer sentiment for December fell to 100.7 from 102.7 in November, people with access to the study said Friday.

Expectations concerning future economic growth are also lower so far this month than they were in November, the survey found.

The retail sales report showed automobile sales rose 1.3% to $56.7 billion in November, after a 2.6% jump a month earlier. Economists had expected sales by car dealers to drop in November after scoring the biggest monthly increase this year during October.

Excluding automobiles, overall retail sales in November were up 0.4% following a 0.8% increase in October.

Nearly every category of product measured by the monthly report showed a pickup in sales during November.