December 12, 2009 in Business

Hopes for recovery buoyed

Inventories, China trade improve
Martin Crutsinger And Anne D’Innocenzio Associated Press
 

Retail surprise

Retail spending rose 1.3 percent in November, more than twice the expected gain.

Other surprises: Businesses stopped cutting inventories. That lifted hopes for higher factory production as companies restock depleted shelves. And China posted better results in areas ranging from exports to retail sales.

What it means: The global economic recovery may be stronger than has been forecast.

WASHINGTON – Just in time for Christmas, the fragile economic recovery is showing signs of strengthening: Consumers are spending, companies are rebuilding stockpiles and Chinese exports are mounting a comeback.

Data released Friday eased some worries about Americans’ willingness to spend this holiday season. But stores remain worried that they may have to offer deeper discounts than planned, perhaps as early as this weekend, because of mediocre sales so far.

Most stores have reported lackluster results for the start of the holiday season, so the Commerce Department’s retail-sales report for November was encouraging. Sales rose 1.3 percent – the healthiest advance since August and more than double the increase economists had expected.

Economists consider the Commerce Department figures a more inclusive figure than the stores’ data. The government figures cover a broader category of spending, from home furnishings to electronics to gasoline station sales.

They also include online sales and results from electronics chains, two bright spots for the holiday season. And they take in Wal-Mart Stores Inc., the world’s largest retailer, which no longer reports monthly sales.

Stocks rose moderately after the sales report was released and mostly finished up. Retail stocks rose sharply, with Macy’s surging more than 6 percent and Saks up 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.

Signs of improvement were not limited to the American economy.

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.

© Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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