US retail sales register marginal increase in November

US retail sales register marginal increase in November
WASHINGTON - Retails sales in the US for the month of November registered a marginal increase riding on the back of an increased demand for automobiles as well as building supplies as the victims of the Gulf Coast hurricanes stepped up the rebuilding process.

The US Commerce Department said on Tuesday that retail sales for November were up by 0.3 percent, marginally less than analysts' predictions of a 0.4 percent boost. The main sector that showed increased demand was the auto sector where sales rose by 2.6 percent after registering losses in the previous three months. Analysts said that these figures demonstrated that the job market will once again begin to look up as gasoline prices return to pre-Katrina levels.

There was a 5.9 percent drop in sales of gasoline for November as people began to ease up on buying it in advance. Paul Ashworth, senior international economist at Capital Economics said that the fall in gas prices was good news for consumers, "While the drop in gasoline prices makes these sales figures look bad, it is of course good news for spending in real terms, which is what really counts," he observed.

If the fall in gasoline sales were to be excluded, retail sales rose by 1.0 percent in November. Global Insight analysts said that even though the situation is not booming, it appeared healthy, "Excluding autos, spending growth looks healthy -- not a blockbuster holiday season, but far better than it appeared a couple of months ago when gasoline prices were over $3 per gallon," Nigel Gault, economist at the firm said.

In another report, the Commerce Department said that US businesses increased their inventories by 0.3 percent in November after a gain of 0.5 percent in September. This figure was however less than the 0.5 percent gain that the analysts had expected. Sales at departmental stores recorded a gain of 0.6 percent, showing that even though the holiday season has begun, the consumer is yet to really loosen his pockets. All leading retailers have reported mixed sales with increases during Thanksgiving and a drop in the period after that.