With declining gas prices, consumers in the U.S. apparently felt free to spend money on other goods and services. One indicator of retail sales, which is known as control retail sales, rose in November and surpassed expectations, the Financial Times reported.
Control sales, which excludes building materials, food services, automobiles and gas, increased by 0.9 percent month-on-month at the time. By comparison, only a 0.4 percent increase was expected. At the same time, sales of gasoline declined by 2.3 percent while furniture sales rose by 1.2 percent and electronic sales jumped by 1.4 percent.
MFR Chief U.S. Economist Joshua Shapiro said, according to FT, that the “report appears to point toward somewhat faster growth in Q4 than we have been forecasting, although much will depend on December retail sales results as well as data on the enormous service sector which are not yet available.”
Inflation, too, grew at its most leisurely pace in three quarters by only 0.1 percent. According to FT, the reports of slow inflation along with sturdy retail sales “is likely to bolster the case for the Federal Reserve to dial back on their pace of rate tightening next year.”
The news comes as retail store and restaurant sales grew by only 0.1 percent from August to September to reach a seasonally-adjusted figure of $509 billion, clocking in short of economists’ expectations. Economists had predicted a month-over-month rise of 0.7 percent at the time. Hurricane Florence, which reached North Carolina in September, might have been an economic factor behind the changes.
It was also noted that department store sales fell by 0.8 percent. But sales at non-store retailers, including mail order catalogs and eCommerce sites, increased by 1.1 percent. Sales at gas stations were higher than they were a year before, but they dropped by 0.8 percent. Those statistics come as data released in late September indicated that consumer spending in the U.S. grew in August by 30 basis points, as estimated by the Commerce Department.