Local, national retailers have hopes for strong holiday sales
Posted December 11, 2009 8:39 a.m. EST
Updated December 11, 2009 10:59 p.m. EST
Raleigh, N.C. — Businesses counting on the holiday season for a big chunk of their annual sales got good news Friday from the Commerce Department.
Retail sales rose more than expected in November, boosting hopes that the all-important consumer sector will support the fragile recovery.
The government's report came as a surprise because the nation's retailers have been reporting generally lackluster results for the start of the holiday shopping season and consumer spending accounts for 70 percent of overall economic activity.
Economists' general view has been that double-digit unemployment levels would keep consumers cautious in their spending and act as a drag on the economy as it struggles to emerge from the worst recession since the 1930s.
At Bevello in Raleigh’s Cameron Village, shopkeeper Meagan Scherberger has seen a steady stream of customers through the door.
“I don't think it is going to be as bad as people expect," she said.
At Uniquities, another Cameron Village boutique, spending is also in fashion.
"We've been very blessed to be busy this far," Jamie Goodson said.
Mike Walden, an economist at North Carolina State University, said the data support what the retailers report.
“Either the recession is at its tail end or we actually may officially see the end of the recession recurring now," he said.
"Some of our indicators are beginning to bottom out. Others are actually beginning to go upward."
He warned not to expect full economic recovery to happen overnight. Consumers are still saddled with a lot of debt brought on by the recession and many people still do not have jobs. Most economists expect the unemployment rate – now at 10 percent – to continue to rise in coming months and remain above 9 percent through the end of next year.
“It will be slow going," Walden said. He predicted some job gains near the beginning of 2010, but said a return to pre-recession economic levels could be four years away.
At Uniquities, Goodson is cautiously optimistic.
"Today is wonderful. I don't think we can predict how tomorrow is going to be,” she said.
“We can hope that it is great, but I think that is part of our economy right now is it is unpredictable."
Nationwide, sales at department stores increased 0.7 percent, and the broader category that includes big retailers such as Walmart Stores Inc. and Target Corp. posted a 0.8 percent increase.
Sales also jumped 2.8 percent at electronics and appliance stores, and 1.5 percent at hardware stores.