WASHINGTON (Reuters) - Retail sales were solid in November as the holiday shopping season got underway, but a good portion of consumer dollars went to higher-priced gasoline. WASHINGTON (AP) - It was the biggest sales advance in six months and reflected widespread strength in a number of areas from department stores to clothing shops and furniture stores. Indeed, a closer look at today's Retail Sales report confirms that year-to-date consumer spending IS widespread - it's up from the same period last year in every retail sector except for "Building Materials" (only 8% of the market for total retail sales), due to weakness in the housing market.
And although consumer spending at gas stations increased by 5% this year, that is actually less than the gains in spending for clothing, food and health products. Further, if you take gasoline sales out of retail sales completely, consumer spending is still up 4.2% from last year. Higher gas prices contributed only 1/10 of 1% to overall consumer spending (see chart above)!!
Bottom Line: Despite the perception of widespread consumer gloom and pessimism, the November spending spree reflects a much more optimistic and upbeat American consumer.