WASHINGTON — A strong start to the holiday season is raising confidence that the consumer is back and that 2011 could be a better year for the economy than expected.
Retail sales are rising, boosted by the best month for department stores in two years. Inflation remains tame. Businesses are restocking their shelves in anticipation of more consumer demand. And a survey of chief executives at America’s biggest companies suggests hiring will pick up in the next six months.
High unemployment remains a concern. The Federal Reserve singled out the nation’s 9.8 percent jobless rate Tuesday when it said it plans to maintain the pace of its $600 billion Treasury-bond-buying program.
But the latest government data, combined with an emerging package of tax cuts and long-term unemployment benefits, are prompting economists to ramp up their forecasts for growth in the months ahead.
“We could be on the verge of a period of economic activity that will surprise everybody by how strong it is,” said Jonathan Basile, a vice president for economics at Credit Suisse Securities. “That tends to happen in recoveries when everything starts to ignite at the same time.”
Retail sales jumped 0.8 percent in November, the Commerce Department said Tuesday. It was the fifth straight monthly gain. Department stores led the way with a 2.8 percent gain, the biggest since a 3 percent increase in November 2008.
Retailers have been particularly aggressive in their holiday sales promotions this year, putting many consumers in the mood to spend despite high unemployment and weak job gains.
The Business Roundtable survey found that 45 percent of CEOs plan to hire within six months — the highest percentage for that group in eight years. The survey was released a day before President Barack Obama is to meet with a group of corporate executives to discuss job creation and making the U.S. more competitive.
Wholesale prices rose 0.8 percent in November, mostly because of a jump in energy prices. Core inflation, which excludes volatile energy and food prices, ticked up only 0.3 percent. A report on consumer prices is to be released today.
