Key retail sales measure jumped in November

Retail sales rose modestly in November but a key measure posted a healthy jump as the holiday shopping season got into full swing and solid job growth buoyed spending.

Sales rose 0.2%, the Commerce Department said Friday, slightly below the 0.3% expected by economists.

But excluding volatile autos and gasoline, sales increased 0.5%. Economists expected a 0.4% rise.

Gasoline sales fell 0.8% as a result of the continuing fall in prices and auto sales declined 0.4%.

But other categories climbed sharply as the holiday sales season officially kicked off with Black Friday. Sales jumped 0.6% at electronics and appliance stores, 0.8% at clothing stores, 0.7% at general merchandise outlets, 0.8% at sporting good stores, and 0.6% for online retailers.

Furniture stores saw a 0.3% drop after recent increases.

The National Retail Federation expects holiday sales to increase 3.7% this year, below last year's 4.1% pace.

Retail sales have been sluggish in recent months, partly because of lower gas prices, but even core measures have disappointed. The healthy gain in November purchases, excluding gas and autos, could be a sign that consumers are poised to fuel strong seasonal shopping gains.

Friday's report "dismisses any concerns of a potential slump in household spending after a couple of weaker months in August and September," economist Steve Murphy of Capital Economics wrote in a note to clients.

The economy added a solid 211,000 jobs in November following blockbuster gains of 298,000 the previous month. The strong payroll gains, along with cheap gasoline and reduced household debt, have supported consumption and economic growth this year. Those effects have more than offset low oil prices, a strong dollar and overseas weakness, which have hampered exports and industrial output. Consumer spending accounts for more than two thirds of economic activity.

The Federal Reserve is expected to scrutinize Friday's report as a final reading of consumption before it makes an expected move to raise interest rates next week for the first time since 2006. Murphy says the data "supports the case for a rate hike."