WASHINGTON — Consumers stepped up their spending at retail stores last month, providing a boost to the economy in the early phases of the winter holiday shopping season.
Retail sales rose 0.7% in November, the Commerce Department said Tuesday, a solid increase and higher than October’s 0.5% gain. Sales jumped 2.6% at auto dealers and drove most of the gain. Some of that demand likely reflected a need for new cars in parts of the southeast slammed by Hurricane Helene in October.
The boost in spending underscores that the economy is still growing at a healthy pace even with higher interest rates, a trend that could cause the Federal Reserve to lower borrowing costs more slowly next year than was previously signaled. The Fed will announce its latest rate decision Wednesday.
The economy expanded at nearly a 3% annual pace in the July-September quarter and some economists forecast another solid gain in the final three months of this year. There are some signs of sluggishness in the job market, as hiring has weakened since last summer, but layoffs are also relatively rare and the unemployment rate is at a low 4.2%. Paychecks are growing at a solid 4% pace, on average nationwide, which is modestly faster than inflation and helps fuel more spending.
Sales rose modestly at stores selling furniture, electronics and building materials. Since the retail sales report isn’t adjusted for inflation, some of the increase reflects higher prices. Sporting goods stores reported a…
