Retail sales jump more than expected

updated 6:39 p.m. ET Dec. 13, 2006

WASHINGTON - Consumers battered by a multitude of economic woes came roaring back in November, pushing retail sales up by the largest amount in four months.

The nation’s retailers saw sales rise by 1 percent last month, following three straight months of lackluster performance. Sales were flat in August and had fallen in September and October.

The November gain, which was the best showing since a 1.4 percent increase in July, was coming at a critical time at the start of the holiday shopping season.

In other news, the amount of inventories held on shelves and backlots rose by 0.4 percent in October, after a 0.3 percent increase in September.

The increase in inventories was slightly below the 0.5 percent that economists had been expecting but followed the pattern of moderate increases as businesses have succeeded in keeping inventories under control even as the overall economy has slowed this year.

The November retail sales performance was ten times better than the tiny 0.1 percent rise that economists had been forecasting. Still, it was unclear whether the boom seen in November would carry over through the entire Christmas shopping season.

Some economists cautioned that the November jump could turn out to be a one-month blip rather than the start of a trend of stronger sales.

“We think it is very likely that sales will either be revised down or there will be a hefty drop in December,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

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