U.S. retail sales rise 0.7 pct., most in five months

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WASHINGTON (AP) — U.S. consumers ramped up spending inNovember on cars, appliances and furniture
and made more purchasesonline, signaling growing confidence in the economy at the start of theholiday
shopping season.The Commerce Department said Thursdaythat retail sales rose 0.7 percent, the biggest gain in
five months.October’s figure was also revised higher to 0.6 percent.Twostraight months of healthy sales
suggest steady hiring is encouragingAmericans to spend more this holiday season, particularly on
big-ticketitems. That could give a critical boost to the economic growth.Thursday’sreport "suggests
that the holiday shopping season began on a strongnote," Paul Dales, an economist at Capital Economics,
said in a note toclients.The report also shows that consumers purchased more athome on their computers last
month — and less at traditional stores.Those trends could explain why many retail chains
estimateddisappointing sales over the Thanksgiving holiday weekend, one of themost critical for those
businesses.Auto sales jumped 1.8 percent,furniture purchases rose 1.2 percent and sales at electronics
andappliances stores rose 1.1 percent. Excluding the volatile categories ofautos, gas and building
materials, sales rose a solid 0.5 percent inNovember.Americans also are shifting more spending to online
andcatalog retailers. Online and catalog sales rose 2.2 percent last month,the most in nearly 18
months.Sales were weak at some retailchains. Clothing and grocery stores reported lower sales last month.
Andgains at department stores, health care and sporting goods stores wereall tepid. Nonetheless, Americans
are spending more, which could give amuch-needed boost to the economy in the final three months of the
year.Consumer spending rose only 1.4 percent in the July-September quarter,the weakest gain in nearly four
years.But economists are becomingmore optimistic about the current quarter. Dales expects consumerspending
will rise at about a 3 percent annual pace, roughly double thethird quarter’s rate. He forecasts that
overall growth will be 2 percentat an annual rate.That would be down from the third quarter’ssolid growth
rate of 3.6 percent. But nearly half that growth came frominventory restocking, as companies added more
goods to their warehousesand store shelves. More spending would ensure that businesses aren’tcaught with
unwanted supplies and keep the economy expanding.Consumer spending drives roughly 70 percent of
growth.Hiringhas been solid since the summer, giving more Americans paychecks tospend. Employers added
203,000 jobs in October and the unemployment ratefell to a five-year low of 7 percent. Wages even picked up
a bit andhave risen 2 percent over the past year, outpacing inflation.Copyright 2013 The Associated Press.
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