Retail sales up; CEOs in hiring mood

Associated Press

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 CEOs 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.

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 for this category 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 holiday shopping season accounts for as much as 40 percent of annual revenue and profits for retailers.