Good news comes in threes for global economic recovery
WASHINGTON–Signs of a strengthening global recovery emerged Friday, with consumers boosting retail sales, companies restoring stockpiles and Chinese exports mounting a comeback.
The reports heightened hopes that consumers are starting to feel more comfortable about opening their wallets after months of building savings and reducing debt. Consumer spending, which drives most U.S. economic activity, is vital to a sustained rebound.
The encouraging retail sales report for November was a surprise. U.S. retailers have been reporting generally lacklustre results for the start of the holiday shopping season. But sales rose 1.3 per cent last month, after a 1.1 per cent October gain, the commerce department said. It was the healthiest advance since August and was more than double the increase economists had expected.
Excluding autos, retail sales rose 1.2 per cent – triple the expected gain. A 6 per cent surge in sales at service stations, partly reflecting higher gasoline prices, led the overall increase. But even excluding that jump, retail sales posted a solid 0.8 per cent rise in November.
Most economists have worried that high unemployment would depress spending and drag on the economy as it struggles to emerge from the worst recession since the 1930s.
"The labour market is showing signs of stabilization, and this is giving consumers greater confidence to spend a little more than they were earlier this year," said Chris Rupkey, an economist at Bank of Tokyo-Mitsubishi in New York No teletrack payday loans.
But other analysts cautioned that the economy still faces so many obstacles that consumer spending – and economic recovery – are likely to be sluggish in the months ahead.
"High unemployment, poor income growth, tight credit and the need to pay down debt mean that consumption growth is likely to slow," said Paul Dales, an economist at Capital Economics.
Also sparking optimism was a report Friday that U.S. businesses unexpectedly increased their inventories in October, halting a slide of 13 consecutive declines. The small gain raised hopes that businesses will begin restocking their depleted shelves, helping support the economic recovery.
Businesses boosted inventories 0.2 per cent in October – better than the 0.3 per cent drop economists had expected. Total business sales rose 1.1 per cent, the fifth straight gain.
China’s trade figures for November were the best in a year, with exports falling just 1.2 per cent from the same month of 2008. Retail sales, factory output and investment also saw robust growth last month. The figures released Friday did show a return to inflation, though only at the modest level of 0.6 per cent, after nine months of falling prices.
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