Retailers Are Finally Ringing In Holiday Revenue
Wednesday, December 13, 2006SUSIE GHARIB: Jingling cash registers are raising hopes for a jolly holiday shopping season. The government reported today that retail sales surged in November, the first increase since July. The number was significantly stronger than Wall Street expected and the data eased worries about the slowing economy. Erika Miller reports.
ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: Shoppers were out in full force last month taking advantage of early holiday discounts. Retail sales soared 1 percent in November, more than expected. That comes after .01 of a percent drop in October. Excluding autos and gasoline, sales were up 0.9 of a percent. That's considered a more reliable measure of core household spending and it's the largest gain since January.
KATHLEEN STEPHANSEN, ECONOMIST, CREDIT SUISSE: It's a very telling message. For anyone who was concerned about the consumer -- the demise of the consumer -- it's not happening. In fact the consumer is saving the day.
MILLER: Eleven out of 13 retail categories posted increases with the biggest gains at electronics and appliance stores. Retail analysts were not surprised.
STEPHANIE HOFF: That category has been strong the last several years and it's really being driven by the product cycle, meaning that digital televisions are coming down so dramatically in price that it's spurring more and more consumers to buy them.
MILLER: Experts credit the gains in retail sales to a strong job market and a drop in gasoline prices from earlier this year. Some economists say today's report makes them even more optimistic the economy will withstand the downturn in housing.
STEPHANSEN: I think the important conclusion that we can draw from this is that the correction or slump that we see in the housing sector is not permeating the other parts of the economy, that the consumer sector remains healthy.
MILLER: Although the November data is encouraging, the majority of holiday spending occurs in December. So, experts say this month will be far more important for gauging consumer spending.
HOFF: I do think consumers have been trained to wait for bargains because every year we see these companies cut prices more dramatically as we get to the tail end of the season.
MILLER: And it may be well into the New Year until we have a good sense of holiday spending. Gift cards now account for almost 20 percent of holiday purchases and those sales don't count until the cards are actually used. Erika Miller, NIGHTLY BUSINESS REPORT, New York.
