WASHINGTON – Americans ramped up spending at retail businesses in November, providing a boost to the economy just in time for the holidays.
But traditional retail stores didnt benefit as much from the latest burst of spending. Consumers bought more cars, electronics, furniture and other big-ticket items. They also did more shopping online. Those trends reflect changes in consumers habits and in the broader economy.
Total retail sales rose 0.7 percent in November, the Commerce Department said Thursday. It was the biggest gain in five months. And spending at retail businesses rose 0.6 percent in October, higher than previously estimated.
Steady hiring and modest wage gains have boosted consumers confidence and given them more money to spend. Big increases in stock and home prices have also driven up household wealth. Stock indexes have reached record highs this year, disproportionately benefiting wealthier households.
Those trends are probably pushing up sales of pricier goods. Auto sales jumped 1.8 percent in November, furniture purchases increased 1.2 percent, and sales at electronics and appliance stores rose 1.1 percent.
Consumers who have money are spending and spending big, said Diane Swonk, chief economist at Mesirow Financial. Those who dont arent.
Sales of everyday items fell last month. And sales at sporting goods outlets and department stores barely rose. That partly reflects steep discounting, as many shoppers still demand bargains before they buy.
But it also suggests Americans cut back on smaller purchases after splurging on cars and other large items. And it reflects shifts in where Americans do their holiday shopping.
Many large chains and industry groups have issued gloomy reports on the holiday shopping season. The National Retail Federation estimates that sales during the four-day Thanksgiving Day weekend dropped 2.9 percent to $57.4 billion compared with last year. That was the first decline in the seven years the group has tracked the data.
But more people are shopping on their computers. Online and catalog sales rose 2.2 percent in November from the previous month – the biggest month-over-month gain since July 2012. In the past year, online sales jumped 9.4 percent. Thats double the 4.7 percent increase in total retail sales.