Holiday Season is Merry With Shoppers, Retail Sales Increase

December 12, 2009

(ChattahBox)—The holiday shopping season is in full gear and according to several encouraging sales reports released on Friday, consumers are not only in a better mood, but they are spending more. After the gloomy reports from major department stores following disappointing Black Friday sales, Wall Street braced for another year of sales declines. But Friday’s reports actually show a solid increase in retail sales by 1.3 percent for the month of November. The new figures point to the beleaguered US economy finally emerging from the recession.

According to a Commerce Department report, retail sales showed a broad increase of 1.3 percent. The jump in sales was more than double the forecast predicted by economists on Wall Street. After the cheery figures came out, the markets reacted positively and Goldman Sachs increased its fourth quarter GDP forecast over 3 percent.

Although a good portion of the jump can be attributed to a surge in auto and gas sales, the increase for core sales, subtracting automobiles, gas and building materials, is a solid 0.5 percent. The figures also show an annual increase of 0.2 percent for the first time this year, compared to last year.

Providing further evidence that consumers are in a spending mood; the University of Michigan/Reuters’ reported on Friday that its index rose to 73.4 in the first part of December. And more importantly, the mood of consumers rose to to 79.1, which is the highest it has been since March 2008.

A breakdown of retail sales by category shows an increase in most sectors, with the biggest surge enjoyed by electronics stores, with a solid increase in sales by 2.8 percent. Only clothing and furniture purchases showed a decline.

Economists are buoyed by the strong showing in retail sales, but caution the economy still suffers from high unemployment and a credit crunch. Still, the positive mood of consumers and a strong showing in retail sales is a good sign.

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