Retail Sales Surge By The Biggest Amount In 6 Months
Thursday, December 13th 2007, 7:58 am
By: News On 6
WASHINGTON (AP) _ Consumers put aside worries about the weak economy in November to storm into the shopping malls, pushing up retail sales by the largest amount in six months.
The Commerce Department reported Thursday that retail sales surged by 1.2 percent last month, double the gain that economists had expected. That followed a much weaker 0.2 % rise in retail sales in October.
Half of the November increase came from a big jump in gasoline pump prices and therefore was not seen as a sign of strength in consumer demand. But there were widespread gains across a number of other areas from department stores to appliance and furniture stores.
In other economic news, wholesale prices shot up by 3.2 % in November, the biggest increase in 34 years. The gain was propelled by a record rise in wholesale gasoline prices. Excluding the volatile food and energy sectors, the Labor Department said inflation rose by 0.4 %.
In a third report, new applications filed last week for unemployment benefits dropped by 7,000 to 333,000. That was the lowest level since the middle of November and indicated that employers aren't resorting to large-scale layoffs as they cope with the economic slowdown.
The big gain in retail sales was the largest increase since a 1.6 % jump last May. Economists had expected a much weaker 0.6 % rise, believing that a multitude of problems facing consumers, from a prolonged housing slump to rising troubles in obtaining credit, would dampen spending.
Many economists believe those problems will seriously depress growth over the next six months, raising the possibility of a full-blown recession, something the country has not had to endure since 2001.