By MARTIN CRUTSINGER
AP Economics Writer
WASHINGTON (AP) — 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 lackluster results for the start of the holiday shopping season. But sales rose 1.3 percent last month, after a 1.1 percent October gain, the Commerce Department said. It was the healthiest advance since August. And it was more than double the increase economists had expected.
Excluding autos, retail sales rose 1.2 percent — triple the expected gain. A 6 percent surge in sales at service stations, partly reflecting higher gasoline prices, led the overall gain. But even excluding that jump, retail sales posted a solid 0.8 percent 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 jobless rate did drop to 10 percent last month from 10.2 percent in October.
“The labor 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, chief financial economist at Bank of Tokyo-Mitsubishi in New York.
But other analysts cautioned that the economy is still facing a number of headwinds that will likely depress consumer spending 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. “The failure of consumers to turn up to the party will be the main reason why the overall economic recovery will ultimately disappoint.”
Stocks were moderately higher in early trading Friday after the retail sales report was released. Retail stocks rose sharply, with Macy’s and Saks both surging about 4 percent.
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 percent in October — better than the 0.3 percent drop economists had expected. Total business sales rose 1.1 percent, the fifth straight gain.
Steadily rising sales could encourage businesses to restock shelves and boost factory production, bolstering a broader recovery.
China’s trade figures for November were the best in a year, with exports falling just 1.2 percent 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 percent, after nine months of falling prices.
Asian markets rallied as investors were heartened by the signs of rising global demand that could lift other trade-reliant economies in the region as consumers in the U.S. and elsewhere begin spending more after months of holding back.
The November U.S. retail sales report showed auto sales rose 1.6 percent, a solid performance after a 7.1 percent surge in October.
Sales at department stores rose 0.7 percent. And the broader category that includes big retailers such as Wal-Mart 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. Sales did fall 0.7 percent at furniture stores, a surprise since analysts had expected a rebound in home sales to bolster demand for furniture.
After posting two straight gains after more than a year of declines, big chain retail stores earlier this month reported a dip in November sales. Those figures don’t include Wal-Mart, the world’s largest retailer, which no longer reports monthly sales.
But a diverse group of stores, including Macy’s Inc., Saks Inc., Abercrombie & Fitch Co. and Target, did post sharper-than-expected sales declines in November.
The overall economy rose at an annual rate of 2.8 percent in the July-September quarter, the first increase after a record four straight declines. Analysts had forecast growth to sag a bit in the current quarter and the first half of 2010 because they expected consumer spending would weaken under the weight of 10 percent unemployment.