U.S. retail sales barely rose in November as households cut back on purchases of motor vehicles, suggesting some loss of momentum in economic growth in the fourth quarter.
Continue Reading Below
The Commerce Department said on Wednesday retail sales edged up 0.1 percent after two straight months of strong gains.
October retail sales were revised downward to show a 0.6 percent increase instead of the previously reported 0.8 percent rise.
Sales were up 3.8 percent from a year ago. Excluding automobiles, gasoline, building materials and food services, retail sales also nudged up 0.1 percent last month after a downwardly revised 0.6 percent increase in October.
These so-called core retail sales, which correspond most closely with the consumer spending component of gross domestic product, were previously reported to have advanced 0.8 percent in October.
Economists had forecast overall retail sales increasing 0.3 percent and core sales also gaining 0.3 percent last month.
The softer-than-expected retail sales numbers last month suggest some cooling in consumer spending in the fourth quarter after solid gains in the July-September period. Still, consumers should continue to support economic growth in the fourth quarter.
Data on the labor market, manufacturing and housing have offered a fairly upbeat view of the economy early in the fourth quarter. That, together with signs that inflation is perking up, are expected to encourage the Federal Reserve to raise interest rates later on Wednesday.
The U.S. central bank hiked its overnight benchmark interest rate last December for the first time in nearly a decade.
The Atlanta Fed is forecasting gross domestic product rising at a 2.6 percent annualized rate in the fourth quarter. The economy grew at a 3.2 percent pace in the third quarter.
Last month, auto sales fell 0.5 percent, the largest decline since March, after increasing 0.5 percent in October. Sales at building material stores rose 0.3 percent.
Receipts at clothing stores were flat, suggesting a weak start to the holiday shopping season. Department stores like Macy's and Kohl's are facing intense competition from online retailers such as Amazon, which have snatched a large chunk of the market share.
Sales at online retailers gained 0.1 percent last month after surging 1.4 percent in October. Receipts at restaurants and bars increased 0.8 percent, while sales at sporting goods and hobby stores fell 1.0 percent.
Receipts at service stations gained 0.3 percent after jumping 2.5 percent in October. That reflected falling gasoline prices.
((Reporting by Lucia Mutikani; Editing by Andrea Ricci))