Washington, DC, December 13, 2005--Retail sales came in weaker than expected in November as gains at department stores and specialty clothing stores slowed significantly, a worrisome development at the start of the holiday shopping season.
The Commerce Department reported Tuesday that sales were up 0.3 per cent in November, slightly below the 0.4 per cent gain that analysts had been forecasting. The strength last month came from a 2.6 per cent rebound in auto sales, which had fallen for three consecutive months after surging in July.
The 0.3 per cent increase in November sales followed a 0.3 per cent gain in October, which was revised upward from an initial estimate that sales had fallen by 0.1 per cent in October.
The strength last month came from the 2.6 per cent jump in auto sales, an advance which followed declines of 11.7 per cent in August, 3.4 per cent in September and 1.3 per cent in October. Auto dealers were hurt by a drop in demand after attractive summer discounts were halted. Sales of gas-guzzlers also slumped after gasoline prices spiked above $3 per gallon in early September.
Excluding autos, retail sales would have been down 0.3 per cent, the biggest drop in 19 months.
However, much of that weakness reflected a good development for consumers--falling gasoline prices. Sales at gasoline stations dropped 5.9 per cent in November, the biggest one-month decline in 2 1/2 years. Retail sales figures are not adjusted to take account of changes in the price of items sold.
Excluding the decline in gasoline sales, retail sales would have posted a 1 per cent rise in November, the best showing since a 1.4 per cent increase last July.
Sales at department stores were up 0.5 per cent in November, a slowing of growth after a big 1.6 per cent surge in October. Sales at specialty clothing stores edged up a slight 0.2 per cent last month after a huge 2.6 per cent gain in October.
