Shoppers Defy Holiday Gloom, Power Up Retail Sales

By Agence France-Presse Consumers, the backbone of the US economy, defied grim holiday forecasts and pushed retail sales higher in November, government figures showed Monday. Despite a slump in motor vehicle sector, overall retail sales rose a seasonally adjusted 0.1 percent from the previous month, a better than expected start to the fastest sales period of the year. Wall Street analysts had widely predicted no change. Stripping out motor vehicle sales, which slumped 1.3 percent, retail sales advanced by a solid 0.5 percent, gaining on a broad front, the Commerce Department report showed. Consumer spending is scrutinized by the financial markets because it accounts for two-thirds of US economic activity. The retail sales report is sure to be welcomed by policymakers on the Federal Open Market Committee (FOMC) who are widely expected to raise key short-term interest rates at a meeting Tuesday. Brisk sales may assuage concerns that higher interest rates could stall the economy. Copyright Agence France-Presse, 2004