U.S. Retail Sales Probably Rose in November on Discounts, Wages
By Joe Richter
Dec. 13 (Bloomberg) -- Retail sales in the U.S. probably increased in November as discounts and wage gains helped consumers weather near-record fuel costs, economists said before a government report today.
Purchases climbed 0.6 percent after rising 0.2 percent in October, according to the median estimate in a Bloomberg News survey. A separate report may show higher energy costs pushed wholesale prices up.
More jobs and higher incomes may cushion the damage from $3-a-gallon gasoline and falling home values, preventing a collapse in demand, economists said. Federal Reserve policy makers, who said this week that they saw ``some softening'' in spending, took additional steps yesterday to spur bank lending after lowering the benchmark interest rate.
``The big factor for the consumer is whether employment holds up in coming months,'' said Peter Kretzmer, senior economist at Bank of America Corp. in New York. ``Spending is slowing, but overall, the consumer is still holding up.''
The Commerce Department will issue the sales report at 8:30 a.m. in Washington. The 80 forecasts in the Bloomberg survey ranged from a decline of 0.2 percent to a gain of 1.2 percent. Retail sales make up almost half of all consumer spending, which in turn accounts for more than two-thirds of the economy.
The report is also forecast to show purchases excluding automobiles rose 0.6 percent after a 0.2 percent October gain, according to the survey median.
Wholesale Prices
Also at 8:30 a.m., the Labor Department may report prices paid to producers jumped 1.5 percent in November, the most in a year, after a 0.1 percent increase the prior month, according to the Bloomberg survey median. Core costs, which exclude food and energy, probably rose 0.2 percent following no change.
Employers hired more workers than forecast in November and hourly wages rose more than projected, the Labor Department reported last week. The figures suggested job growth remains one of the few bright spots in the economy.
Bentonville, Arkansas-based Wal-Mart Stores Inc., the world's largest retailer, said November sales rose within the company's forecast as shoppers stocked up on holiday food and gifts. Wal-Mart increased post-Thanksgiving discounts to lure shoppers burdened by higher gasoline and food costs.
Sales of cars and light trucks in November were stronger than most analysts projected, rising to a 16.2 million annual pace from a 16.1 million rate a month earlier.
Gasoline's Influence
The tone of today's spending report will hinge on whether a jump in receipts at service stations, reflecting higher gasoline prices, accounted for much of the expected increase in sales, economists said.
A disappointing reading would suggest demand for other goods is sagging under the weight of rising fuel costs and falling home values. Higher energy bills are siphoning cash from Americans' wallets, while lower property values make it harder for owners to tap home equity for extra cash.
United Airlines Inc., Delta Air Lines Inc., Continental Airlines Inc. and Southwest Airlines Co. have cut 2008 U.S. capacity plans amid growing concern over rising oil prices and a weakening economy.
``We are concerned about growing evidence of slowing economic growth that would inevitably affect passenger demand, coupled with a surge in energy prices,'' Southwest Chief Executive Officer Gary Kelly said in a statement on Dec. 4.
The Fed, European Central Bank and three other central banks yesterday moved to alleviate a credit squeeze that's threatening growth. The banks took the action after interest- rate cuts in the U.S., U.K. and Canada failed to allay concerns that banks will rein in lending, sending the U.S. into recession.
The economy will grow 1 percent this quarter, a fifth the pace of the previous three months, according to the median estimate of economists surveyed by Bloomberg News this month. The forecast is a half point less than projected in October. Growth in the first three months of next year will also be less than previously estimated, economists said.
Bloomberg Survey
================================================================ PPI Core Retail Retail PPI Sales ex-autos MOM% MOM% MOM% MOM% ================================================================
Date of Release 12/13 12/13 12/13 12/13 Observation Period Nov. Nov. Nov. Nov. ---------------------------------------------------------------- Median 1.5% 0.2% 0.6% 0.6% Average 1.4% 0.2% 0.6% 0.7% High Forecast 2.5% 0.3% 1.2% 1.6% Low Forecast 0.3% 0.1% -0.2% 0.0% Number of Participants 77 74 80 73 Previous 0.1% 0.0% 0.2% 0.2% ---------------------------------------------------------------- 4CAST Ltd. 1.9% 0.3% 0.8% 0.7% Action Economics 2.0% 0.2% 0.4% 0.6% AIG Investments 1.1% 0.3% 0.7% 0.8% Aletti Gestielle SGR 1.0% 0.2% 0.5% 0.4% Allianz Dresdner Economic --- --- 0.5% --- Argus Research Corp. 0.6% 0.2% 0.6% 0.6% Banc of America Securitie 1.2% 0.1% 0.5% 0.6% Bank of Tokyo- Mitsubishi 2.0% 0.2% 0.8% 0.8% Bantleon Bank AG 1.7% --- 0.6% 0.6% Barclays Capital 1.4% 0.2% 0.8% 0.9% BBVA 1.3% --- 0.4% --- Bear, Stearns & Co. 1.5% 0.2% 0.9% 0.8% BMO Capital Markets 1.7% 0.2% 0.5% 0.4% BNP Paribas 1.6% 0.2% 0.6% 0.7% Briefing.com 2.0% 0.2% 0.8% 0.8% Calyon 1.6% 0.2% 0.5% 0.5% CEMEX 1.0% 0.1% 0.6% 0.5% CIBC World Markets 1.4% 0.2% 0.7% 0.7% Citi 1.7% 0.2% 0.5% 0.7% ClearView Economics 0.8% 0.2% 0.7% 0.5% Commerzbank AG 1.4% 0.2% 0.9% 0.9% Credit Suisse 1.5% 0.2% --- --- Daiwa Securities America 0.7% 0.2% 0.5% 0.6% Danske Bank 1.4% 0.2% 1.0% 0.6% DekaBank 1.6% 0.2% 0.7% 0.8% Desjardins Group 0.7% 0.2% 0.8% 0.8% Deutsche Bank Securities 0.7% 0.1% 0.2% 0.3% Deutsche Postbank AG 1.6% 0.2% 0.6% 0.6% Dresdner Kleinwort 1.5% 0.2% 0.7% 0.8% DZ Bank 1.7% 0.2% 0.4% 0.5% First Trust Advisors 2.1% 0.2% 0.7% 1.0% Fortis 1.0% 0.2% 0.6% --- FTN Financial 1.0% 0.1% 0.4% 0.5% Global Insight Inc. 2.5% 0.2% 0.7% 0.8% Goldman, Sachs & Co. 1.8% 0.2% 0.7% 0.8% H&R Block Financial Advis 1.1% 0.2% 0.4% 0.5% HBOS Treasury Services 1.3% 0.2% 0.6% 0.6% Helaba 1.5% 0.2% 0.6% 0.4% High Frequency Economics 1.9% 0.2% 0.7% 0.7% Horizon Investments 1.3% 0.2% 0.4% 0.4% HSBC Markets 2.0% 0.3% 0.6% 0.7% IDEAglobal 1.5% 0.2% 0.5% 0.6% Informa Global Markets --- --- 0.5% 0.7% ING Financial Markets 2.0% 0.2% 0.4% 0.5% Insight Economics 1.5% 0.2% 0.4% 0.4% Intesa-SanPaulo 1.7% 0.2% 0.4% 0.5% J.P. Morgan Chase 1.8% 0.3% 0.8% 1.0% Janney Montgomery Scott L --- 0.3% 0.5% --- JPMorgan Private Client 1.6% 0.1% 0.4% 0.5% Landesbank Berlin 0.4% 0.1% -0.2% 0.0% Landesbank BW 0.6% --- 0.4% --- Lehman Brothers 1.9% 0.1% 0.6% 0.7% Lloyds TSB 0.8% 0.2% 0.5% 0.7% Maria Fiorini Ramirez Inc 1.8% 0.2% 0.6% 0.7% Merrill Lynch 1.5% 0.2% 0.3% 0.6% MFC Global Investment Man 1.5% 0.2% 0.6% 0.8% Mizuho Securities 0.3% 0.1% 0.5% 0.4% Moody's Economy.com 0.8% 0.2% 0.5% 0.5% Morgan Keegan & Co. 1.0% 0.2% 0.6% 0.6% Morgan Stanley & Co. 1.9% 0.3% 1.0% 1.0% National Bank Financial 0.7% 0.2% 0.5% 0.6% National City Bank 1.2% 0.1% 1.2% 1.6% Natixis 2.0% 0.2% 0.6% --- Nomura Securities Intl. 0.8% 0.2% 0.6% 0.5% Nord/LB 1.4% 0.2% 0.5% 0.4% PNC Bank 1.3% 0.2% 0.4% 0.6% RBS Greenwich Capital 2.1% 0.3% 0.9% 0.7% Ried, Thunberg & Co. 1.9% 0.1% 0.7% 0.9% Scotia Capital 1.0% 0.1% 0.4% 0.5% Societe Generale 1.6% 0.2% 0.6% 0.8% Stone & McCarthy Research 1.5% 0.2% 0.5% 0.6% TD Securities --- --- 0.7% 0.5% Thomson Financial/IFR 1.1% 0.1% 0.6% 0.8% UBS Securities LLC 1.9% 0.2% 0.8% 0.9% Unicredit MIB 1.7% 0.2% 0.4% --- University of Maryland 1.8% 0.1% 0.4% 0.5% Wachovia Corp. 1.5% 0.2% 1.0% 1.2% Wells Fargo & Co. 2.0% --- 0.4% 0.6% WestLB AG 1.3% 0.2% 0.5% 0.6% Westpac Banking Co. 2.0% 0.1% 0.7% 0.5% Wrightson Associates 1.8% 0.1% 0.7% 1.1% ================================================================
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