Retail sales probably rose in November in U.S. Consumers Driven Recovery

Retail sales probably rose in November for the fifth consecutive month that the Americans began their holiday shopping, showing consumers are playing a greater role in the U.S. recovery, economists said before a report this week .

The projected increase of 0.6 percent followed by a 1.2 percent increase in purchases of October, according to the median of 62 estimates in a Bloomberg News survey before Commerce Department figures for 14 December. Other reports may show industrial production and housing construction rebounded, while the cost of living was stable.

Chains such as Target Corp. and Macy's Inc. has attracted customers with discounts for the weekend of Thanksgiving, the traditional kick off the busiest season of the year sales. While the U.S. economy is picking up the game in 2011, high unemployment and the risk of a prolonged fall in prices remains a concern for those responsible for the Federal Reserve meeting this week.

"The holiday season is running at a strong pace," said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott LLC in Philadelphia. "There is a broad-based upturn in sales support aggressive discounts. The economy is improving, but there are still many obstacles, such as labor market weakness."

The National Retail Federation has forecast sales for November and December holiday will increase by 2.3 percent from a year ago, the most since 2006. A Bloomberg survey taken 2 December-8 December showed economists raised projections of consumer purchases, the bulk of the economy, to 2.6 percent next year, above its estimate of 2.3 percent the previous month.

Improved confidence

Retailers also benefit from consumer confidence, which rose in December to the highest level in six months, according to a survey by Thomson Reuters / University of Michigan report released last week. The optimism may be linked to stock market gains and address the president Barack Obama with Republican leaders to keep tax rates increase next year.

Sales at stores open at least a year rose in November for more than eight months, compared with a year ago and beat estimates of analysts, industry reports showed. Discount retailers began earlier this month that in recent years and continued until Black Friday, the day after Thanksgiving.

Target and Costco Wholesale Corp. led the sales gains discount stores last month, while teen retailer Abercrombie & Fitch Co. and JC Penney Co., the third largest department store chain in U.S. Increases were also reported better than expected, according to company announcements.

Broad-based gains

The purchases are expanding beyond the Christmas gifts and clothing. Home Depot Inc., the world's leading retailer of home improvement, raised its earnings forecast for the full year on stronger demand in the fourth quarter for the plumbing and electrical items.

"Looking in November and December, we see the force through the store," said Chief Financial Officer Carol Tome December 8 by telephone from a meeting with analysts in Boston. The Atlanta-based company had a "good Black Friday."

Investors have pushed up retail stocks this year as spending accelerates. Supercomposite The Standard & Poor's retail index has gained 27 percent since the December 31, 2009, compared with an increase of 11 percent for the S & P 500.

Sustain the demand can be difficult without an improvement in the unemployment rate, which in November reached a seven-month high of 9.8 percent. Fed officials due to hold its last meeting on 14 December 2010, may renew his strategy to buy an additional $ 600 billion of Treasuries in June to try to cut unemployment and avoid deflation, or falling a prolonged price.

Stable prices

Consumer prices rose 0.2 percent in November for the second consecutive month, according to the Bloomberg survey median ahead of a Labor Department report on December 15. Excluding the costs of fuel and food, core prices rose 0.6 percent from November 2009, according to the median of the survey, corresponding increase in October was the lowest year on year increase in history.

Among other reports, figures from the Fed on 15 December may show production at factories, mines and utilities rose 0.3 percent in November after stagnating in October, economists projected. The New York Fed Empire manufacturing index of the state on the same day, and overall economic size of the Philadelphia Fed on December 16 may indicate factories continued to expand this month.

Housing, struggling to overcome a drop in demand and persistent foreclosures grew in November after a fall at the beginning of last month, the Commerce Department can show Dec. 16. Rounding out the week, the Conference Board's leading indicator of indicators can strengthen the evidence that the economy is gaining momentum.

Bloomberg Survey

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Release Period Prior Median
Indicator Date Value Forecast
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Retail Sales MOM 14.12% 1.2% 0.6% in November
Retail ex-autos MOM% 12/14 0.4% 0.6% in November
November PPI MOM 12.14% 0.4% 0.6%
November PPI MOM 12.14% -0.6% 0.2%
Business Inv. October MOM 14.12% 0.9% 1.0%
MOM CPI Nov. 1 12.15% 0.2% 0.2%
MOM core CPI 0.0% 15.12% 0.1% in November
12.15% annual CPI 1.2% 1.1% in November
Ind. Prod. MOM% 12/15 0.0% 0.3% in November
Housing Starts, November 12 / 16 000 519 550
Housing Starts MOM 16.12% 6.0% -11.7% in November
Building permits, November 12 / 16 000 552 560
Building Permits MOM 16.12% November 0.9% 1.5%
Philadelphia Fed Index December 16.12 22.5 14.5
LEI MOM 12.17% 0.5% 1.1% in November