The Census Bureau reported today that retail sales increased for the fifth straight month and reached $378.7 billion in November, the second highest monthly level in history (not adjusted for inflation) and the highest level since $379.9 billion in November 2007, the month before the recession started (see top chart above). Compared to a year earlier, November retail sales increased 7.7%, following strong gains of 7.3% in October and 7.4% in September (see bottom chart above). This marks the 13th consecutive month of annual gains in retail sales going back to November of 2009, following 14 months in a row of annual decreases.
Compared to November of last year, all components and sub-components of retail sales have improved, led by strong gains in the sales of motor vehicles (12.5%), building materials (12.3%), sporting goods (12.3%), and clothing (7.5%).
Bottom Line: Despite the ongoing weakness in the labor market and a stubbornly high jobless rate, the ongoing gains in retail sales suggest that the U.S. consumer is coming back as the economic recovery gains momentum by most indicators and measures. As the WSJ reported recently, "After several years of relative thrift, consumers may be parting with their money more willingly simply due to pent-up demand, something industry watchers are calling "frugality fatigue."
