The Commerce Department reported a surprise 1.3% increase in retail sales for November, also up 1.2% ex autos. October's sales were revised downward to +1.1%, and ex-auto were revized to 0 from +0.2%.
The report also said that Year over Year sales were up 1.9 percent. This is the first YoY gain since August 2008.
Improvements were broad-based, including cars and parts, and also building materials and appliances and electronic goods. The only negative was the increase of +0.6% in gasoline sales.
Assuming that November's CPI will come in very close to +0.1%, this means that real retail sales have increased about +1.9% in the 7 months since their smoothed 3-month bottom in April, (and ex-autos are up about +1.4%). This translates into a rate of about 3% real growth per year.
As of right now, all of the most recent reported data from the ISM manufacturing index, industrial production, initial jobless claims, and now real retail sales satisfy the criteria I set forth in my series When Will the Economy Add Jobs, namely:
ISM manufacturing index is above 53, ISM employment is at -5 or above, initial jobless claims are at least a sustained 16%-20% off peak, and both Industrial Production and Real retail sales have advanced at a rate of 2.5% or more year-over-year from the bottom.. If there are no negative surprises next week in industrial production, jobless claims, or the CPI, then (subject to the inevitable revisions!) this strongly suggests that actual job growth will be reported by the BLS for December nonfarm payrolls.
