On Thursday, the Department of Commerce announced that retail sales, with the exclusion of automobiles, gasoline, building materials and food services, increased by seven percent in November, the most in eight months. This increase follows a five percent increase experienced in October.
Daniel Greenhaus, chief strategist at BTIG, says as quoted by a Reuters article,
It provides a bit of a boost to fourth-quarter growth estimates… We expect the lower price boost to continue into next year’s first half and improving jobs market, GDP should be well-supported in coming quarters.”
The data exceeded expectations projected by both MarketWatch economists and those on Wall Street, both of whom projected a four percent gain. The gains in consumer spending are attributed to the low gasoline prices, as well as improvement within the US job market. Today, the national average for gas prices stood at $2.62 per gallon. Moody’s Analytics economists estimate consumers have saved approximately $1 BN over the course of a year with each one-cent drop in gasoline prices.
According to Chris Rupkey as quoted by Bloomberg BusinessesWeek, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd.
We could have a blowout period for consumer spending in December, which gives the economy momentum going into 2015… The oil glut is a boon. Employment is growing solidly. The economy is picking up speed.”
Read more here- “Retail Sales Grow the Most in Eight Months,” (Ruth Mantell, MarketWatch)