November Retail Sales Held Down By Gasoline Prices

Sharp contraction in gasoline sales held down November retail sales which rose 0.2 overall and also 0.2 percent when excluding autos. When excluding autos and also gasoline, the strength starts to show with a 0.5 percent gain and when looking at the control group, which excludes gasoline and several other components that slowed in November, sales really jump, up 0.9 percent in a reading that ultimately defines the strength of the results.

Control group sales are direct inputs to personal consumption expenditures and have an outsized impact on GDP. They exclude autos where November growth, against the tough comparison of a sharp gain in October, managed only a 0.2 percent rise, and they also exclude building materials which, also facing a tough October comparison, fell 0.3 percent. Gasoline is also not included in the control group and here sales, because of lower prices tied to November's $20 plunge in oil, fell 2.3 percent. Restaurants are also excluded and here too the results in November were unfavorable, down 0.5 percent

What the control group does include is the remaining balance of the report which is led by a 2.3 percent surge for nonstore retailers (which tracks e-commerce), a 1.4 percent jump at electronics & appliance stores, a 1.2 percent gain for furniture, and an unusually strong 0.9 percent rise at health & personal care stores. Both general merchandise and its department-store subcomponent contributed useful 0.4 percent gains.

Year-on-year rates show less strength and are a reminder that this year's holiday season will, especially for retailers, have to be compared with a very strong one last year. Control group sales are up only 4.4 percent year-on-year which is down 1 tenth from October's rate. Ex-auto ex-gas sales are at 4.6 percent, ex-auto at 4.9 percent, and total sales at 4.2 percent -- all down from last month. Yearly growth at non-store retailers is in the double digits at 10.8 percent but is down 1 percentage point from October.

A positive in today's report is a set of sharp upward revisions to October, now boasting a 1.1 percent monthly gain overall and a 0.7 percent rise for the control group which is a 4 tenths upward revision and, together with November's 0.9 percent surge, point to quarter-to-quarter acceleration and consumer strength for fourth-quarter GDP.