Good News, Bad News

The U.S. Commerce Dept. reported that November 2002 retail sales increased at the fastest rate in three months.

Sales were up 0.4 percent from October, the department said. The month before, they edged up 0.1 percent and in September fell by 1.5 percent.

Excluding auto sales, retail sales rose 0.5 percent in November, a stronger performance than the 0.2 percent rise economists were forecasting. Sales of furniture and home furnishings jumped 2.3 percent, the biggest increase in nearly two years (after a 0.2 percent rise in October).

At electronics and appliance stores, sales rose 0.9 percent on top of a 1 percent increase in October. Food and beverage sales rose 0.9 percent, up from an October 0.1 percent gain. Health and beauty store sales increased 0.3 percent, after a 0.2 percent advance the month before.

Sales at general merchandise stores, including department stores, increased 0.3 percent after a 1.2 percent gain in October. At bars and restaurants, sales rose 0.3 percent last month, a turnaround from the 0.5 percent decline in October.

There were a few weak spots: Clothing sales dropped 1.3 percent in November, after a sharp 5.5 percent rise in October. Sales at book, sporting goods and hobby stores fell 0.5 percent after an October decline of 0.1 percent.

Another problematic report was an increase in new claims for jobless benefits, to 441,000 last week, the highest level since the middle of April. While consumer spending has been the main force keeping the economy going this year, economists agree that if consumer spending is going to continue to grow, the job picture needs to improve sooner rather than later.