US retail sales gain as prices remain steady

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The Independent Online
WASHINGTON (Reuter) - US retail sales rose modestly last month as the key holiday sales season opened, the Commerce Department said yesterday.

The 0.4 per cent gain in November followed a sharply revised 1.9 per cent jump in October sales - the strongest monthly increase since a 2.3 per cent rise in January. Previously, the department said October sales were up 0.9 per cent.

Economists had anticipated a rise of only 0.1 per cent in sales last month. Large retail chain stores indicated that sales since the Thanksgiving holiday in November are stronger than in previous years with Christmas business just getting into full swing. Retail sales have risen from July to November.

Some retail businesses make as much as a third of their annual sales during the holiday season from Thanksgiving through to Christmas. Although November's sales increase was smaller than October's, it added to the impression that demand was firmer.

Car-dealer sales rose 0.6 per cent after a 4.8 per cent increase in October. Excluding cars, retail sales gained 0.3 per cent after a 1.1 per cent rise in October.

The Labour Department said consumer prices rose just 0.2 per cent in November, as steady food prices and a moderating trend restrained a sharp jump in energy prices.

The November rise in the consumer price index followed an unexpectedly large 0.4 per cent gain in October. So far this year, the index has risen at a seasonally adjusted annual rate of 3.1 per cent, compared with a 3.1 per cent gain for all of 1991.

Excluding the erratic food and energy sectors, the so-called core rate of inflation rose 0.3 per cent in November after rising an abnormally high 0.5 per cent in October. Wall Street economists had expected the overall index and the core rate each to rise 0.2 per cent in November.

On Thursday, the department said prices charged by producers fell in November for the first time in 10 months, as vegetable prices took their biggest plunge in more than 27 years and oil prices also tumbled.

The 0.2 per cent drop in the producer price index for finished goods followed a gain of 0.1 per cent in October.

Recent statistics suggest the sluggish economy is slowly gaining strength. But President-elect Bill Clinton, who is weighing a fiscal stimulus package for when he takes office next month, has said it is too soon to declare the period of recession and slow growth of the past two years to be over.

Last week the government reported that the unemployment rate fell for the fifth straight month in November, while the number of new payroll jobs expanded. And on Thursday it reported that weekly claims for state jobless benefits fell to their lowest level in more than three years.

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