Americans ramped up their spending in stores and online in November, which included Black Friday and Cyber Monday, key sales days for retailers.
Spending at stores, online-shopping websites and restaurants rose 0.8% in November from the prior month, the Commerce Department said Thursday. Economists polled by The Wall Street Journal had expected a 0.3% increase in November. Retail sales increased 5.8% from November 2016.
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Electronics and appliance stores and online shopping websites both saw robust growth in sales last month. When excluding the more volatile auto category, which includes cars and car parts, retail sales increased an even more robust 1% in November.
Consumer spending, the key driver of the U.S. economy, has been buoyed by a historically low unemployment rate at 4.1% and repeated stock market highs and increasing values of real estate that have driven up the total net worth of U.S. households.
Spending has outpaced both inflation and wage growth, suggesting Americans are buying more and saving less.
The National Retail Federation, a group that represents retail stores, expected consumers nationwide to spend between about 4.0% more during the holiday shopping season than they had in 2016. That would make 2017 the strongest holiday season since 2014.
"We've had strong reports so far from various retailers that it has been a good and healthy start to the holiday buying season. [It is] perhaps the best start in the past few years. We heard early-on consumers were out there before Thanksgiving," NRF Chief Economist Jack Kleinhenz said.
Though many retailers have struggled in recent years to keep up with consumers' shift to buying some goods online, the brick-and-mortar stores posted sales increases. On top of that, many of those retailers offered fewer discounts this year on Black Friday.
Sales going into the holiday season at some of the nation's largest retailers have been up in different metrics despite pressures from solely-online retailers, including Kohl's, which in its most recent quarter saw growth in sales at stores that were open last year. Kohl's Chief Executive Kevin Mansell said store traffic and sales picked up in late October, setting the retailer up for a strong year-end finish. "We're super confident as we go into the fourth quarter," Mr. Mansell said.
November's retail sales reading comes one day after the Federal Reserve announced its decision to raise short-term interest rates, a sign Fed policy makers feel the economy is strengthening.
"For investors, these numbers cap an interesting week of market events, including Fed action. But even amid record highs, strong numbers like these may further the case that the economic runway may be a bit longer than previously thought," said Mike Loewengart, vice president of investment strategy at E*TRADE.
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(END) Dow Jones Newswires
December 14, 2017 09:52 ET (14:52 GMT)