WASHINGTON — U.S. retail sales surged in November and, for the first time in three months, consumer confidence rose, leading analysts to upgrade their economic-growth forecasts Friday.
Retail sales rose 1.3 percent last month, suggesting consumers were buying aggressively and supporting the economy in the holiday shopping season, the Commerce Department said. Wall Street economists had predicted a 0.7 percent increase.
And, in a sign that consumers should continue to sustain the recovery by spending, the University of Michigan/Reuters preliminary consumer sentiment index moved to 73.4 in mid-December from 67.4 in November. It was expected to come in at 68.8.
“The risk of a double-dip recession is now looking less and less likely,” said Victor Li, associate professor of economics at the Villanova School of Business.
The U.S. economy, emerging from its worst recession since the Great Depression, expanded by an annualized 2.8 percent in the third quarter, the first increase in more than a year. Strong data out Friday and earlier this week indicate that gross domestic product, a broad measure of economic activity, should grow by even more in the final three months of 2009.
A separate Commerce report Friday showed that U.S. business inventories rose 0.2 percent in October, the first increase since August 2008, signaling growing optimism among companies about the economy.
Following the data, analysts at JPMorgan Chase and Credit Suisse raised their fourth-quarter GDP projection to an annualized 4.5 percent from a previous estimate of 3.5 percent growth.
Car purchases and rising gasoline prices played a part in the surprisingly strong November retail-sales increase. Yet most other merchants had good gains, too.
Consumer spending makes up a large part of the economy. Data this week showed the net worth of Americans is rising, as people make some headway in their crawl out of the hole that the financial crisis put them in. The Federal Reserve on Thursday reported total net worth of households increased 5 percent in the July-to-September period, to $53.42 trillion from $50.76 trillion in the second quarter.
