Sales at U.S. retailers rose more than expected in November as consumers stepped up spending on gasoline and a wide range of other goods, data showed on Friday, raising hopes of a self-sustaining economic recovery.
The Commerce Department said total retail sales increased 1.3 percent last month, the largest advance since August, after rising 1.1 percent in October. It was the second straight monthly gain.
Analysts polled by Reuters had forecast retail sales gaining 0.7 percent last month. Overall sales in November were boosted by strong receipts from gasoline stations, increased purchases of motor vehicles and parts, building materials and electronic goods among others.
The numbers were a pleasant surprise. Consumers are starting to spend a little more freely than they have been and that is going to be an important source of sustainable growth, said David Resler, chief economist at Nomura Securities International in New York.
U.S. stock index futures added to gains, while U.S. Treasury debt prices slipped on the stronger than expected data. The U.S. dollar rose sharply against the yen and euro.
Despite slightly lower gasoline prices at the end of November from the end of October, sales at service stations surged 6 percent, the largest increase since June.
Compared to November last year, overall retail sales were up 1.9 percent, the first year-on-year gain since August 2008, a Commerce official said.
The data eased concerns that the economy's recovery could falter because of lackluster consumer spending. The economy resumed growing in the third quarter, fueled mostly by government stimulus.
SPENDING PICKING UP
With the labor market starting to stabilize and household wealth rising, there is growing optimism that consumer spending will soon pick up.
The retail sales report is the latest batch of data this week boosting the chances of the economy expanding at a brisker pace in the fourth quarter than the 2.8 percent annual rate in the July-September period.
Excluding motor vehicles and parts, retail sales increased 1.2 percent in November, the largest increase since January, after being flat in October. Economists had expected a 0.4 percent increase.
Core retail sales excluding autos, gasoline and building materials rose 0.6 percent, advancing for a fifth straight month.
Spending is increasing, which is good, but we'll see how sustainable it is, said Kurt Brunner, portfolio manager at Swarthmore Group in Philadelphia, Pennsylvania.
Sales of building materials climbed 1.5 percent last month, the biggest gain since April 2008, after falling 1.8 percent in October. Purchases of electronics and appliances jumped 2.8 percent, the largest increase since January.
Another government report showed U.S. import prices last month recorded their biggest gain since June, driven by higher fuel costs and a weak U.S. dollar.
Import prices rose 1.7 percent, the Labor Department said, after increasing 0.8 percent in October. Analysts polled by Reuters had expected rise of 1 percent.
Import prices have been steadily rising over the past year and have increased during eight of the last nine months, the Labor Department said. They also rose 3.7 percent from November 2008 in the first annual gain since the October 2007-2008 period.
Excluding petroleum, import prices were up a much slimmer 0.7 percent in November.
(Additional reporting by Lisa Lambert; Editing by Neil Stempleman)