WASHINGTON (AP) — Retail sales likely posted a solid gain in November, helped by strong early holiday shopping.
Economists at JPMorgan Chase said they were looking for a 0.6 percent rise in sales in November and a 0.7 percent increase excluding autos. The Commerce Department will release the new report at 8:30 a.m. EST Tuesday.
In October, total retail sales rose 1.2 percent, the largest gain in seven months. That increase was boosted by strong auto sales.
October marked the fourth straight monthly gain after sales had fallen in May and June. Those declines had raised concerns about the strength of the economic recovery.
Analysts say holiday shopping got off to a strong start in November. The International Council of Shopping Centers’ index showed a 5.8 percent gain in revenue at stores open at least a year compared to November 2009. That was the biggest year-over-year increase since March, a month that had been helped by an early Easter.
Analysts said that heavy holiday discounting, which started as early as October, and an improving economy were helping to boost spending.
Even the weather was playing a part. The arrival of cold weather in November, after two months of unseasonably warm weather, helped to boost sales of coats and other cold-weather gear.
Stores reporting solid sales in November that topped Wall Street expectations were Costco Wholesale Corp., Target Corp., Victoria’s Secret and teen retailer Abercrombie Fitch. Mid-priced department stores including Macy’s Inc. were also big winners, helped by discounts offered during the weekend after Thanksgiving.
The holiday shopping season accounts for as much as 40 percent of annual revenue and profits for retailers. In an effort to spur demand, many stores trotted out the Black Friday discount stickers on selected merchandise as early as late October.
Consumer spending is closely watched because it accounts for 70 percent of total economic activity. The overall economy, as measured by the gross domestic product, has been growing at lackluster rates this year.
High unemployment has kept consumers from boosting their spending at rates generally associated with rebounds from deep recessions. However, economists have boosted their forecasts following an agreement that the White House reached with Republicans, which would extend the Bush-era tax cuts for two years and provide other stimulus to the economy that will total around $850 billion over the next two years.
Analysts at IHS Global Insight, a private forecasting firm, said they expect the economy to grow at a 3 percent rate next year, up from a 2.4 percent GDP forecast before the tax cut package was announced.