U.S. consumer spending appeared to gather momentum in November as households bought furniture, electronics and a range of other goods, which could further allay fears of a significant slowdown in the economy.
The Commerce Department said on Friday retail sales excluding automobiles, gasoline, building materials and food services surged 0.9 percent last month after an upwardly revised 0.7 percent increase in October. These so-called core retail sales, which correspond most closely with the consumer spending component of gross domestic product, were previously reported to have gained 0.3 percent in October. Economists polled by Reuters had forecast core retail sales rising 0.4 percent last month.
November's increase in core retail sales suggested a brisk pace of consumer spending in the fourth quarter. Consumer spending, which accounts for more than two-thirds of the U.S. economy, increased at a 3.6 percent annualized rate in the July-September quarter.
A sharp sell-off on Wall Street and partial inversion of the U.S. Treasury yield curve had stoked fears of a recession. But worries over the economy's health were eased on Thursday after government data showed the number of Americans seeking unemployment benefits fell back to a near 49-year low last week.
Gross domestic product estimates for the fourth quarter are around a 2.4 percent rate. The economy grew a 3.5 percent pace in the July-September period. Overall retail sales, however, rose 0.2 percent in November as cheaper gasoline undercut sales at service stations. Gasoline prices have dropped about 40 cents per gallon since October, according to the U.S. Energy Information Administration.
Oil prices have fallen by a third since the start of October amid concerns about oversupply and a slowing global economy.
Retail sales increased by an upwardly revised 1.1 percent in October. They were previously reported to have surged 0.8 percent.
Sales at service stations tumbled 2.3 percent last month, the biggest drop since May 2017, after rising 3.2 percent in October. Auto sales gained 0.2 percent after accelerating 1.5 percent in the prior month.
Sales at building material stores slipped 0.3 percent.
Receipts at clothing stores dropped 0.2 percent after jumping 1.3 percent in October. Online and mail-order retail sales surged 2.3 percent, the largest gain in a year. That followed a 0.8 percent increased in October.
Receipts at furniture stores vaulted 1.2 percent. Sales at electronics and appliance stores increased 1.4 percent. But sales at restaurants and bars fell 0.5 percent after rising 0.6 percent in October. Spending at hobby, musical instrument and book stores increased 0.4 percent.