Shoppers in the US have spread some Christmas cheer as they shrugged off the threat of higher taxes next year.
Consumer spending probably rose last month, economists said before reports this week.
Household purchases increased 0.4 per cent last month after declining 0.2 per cent in October, according to the median estimate from 66 economists surveyed by Bloomberg before figures are released by the US commerce department due this Friday. Other reports may show home sales and demand for long-lasting goods climbed.
"The economy is holding in," said Jim O'Sullivan, the chief US economist for High Frequency Economics in New York. "For the household sector, the housing numbers have been quite good," he said.
"The labour market numbers are OK."
A jump in car sales last month is among the evidence that the world's largest economy is rebounding from the damage caused by superstorm Sandy. Improving property values and falling fuel costs are helping brace consumers against the more than US$600 billion (Dh2.2 trillion) in tax increases and government spending cuts that will take effect next month without action from Congress.
"There is a lot of nervousness about the fiscal cliff, so I think how that gets resolved will be important to what happens next," Mr O'Sullivan said.
Retail sales rose 0.3 per cent last month after a 0.3 per cent decrease in October, the commerce department reported. Ten of 13 major categories showed gains, led by a 1.4 per cent increase at car dealers, a 2.5 per cent jump at electronics outlets and a 0.9 per cent pickup at clothing stores.
Cars and light trucks sold last month at a 15.5 million annual rate, the fastest pace since February 2008 and up from 14.2 million in October when Sandy kept east coast shoppers away during dealers' busiest time of the month, data from Ward's Automotive Group show.
Limited Brands, the operator of the Victoria's Secret lingerie chain, reported comparable sales rose 5 per cent last month, topping projections for a 3.4 per cent gain. Limited Brands said Sandy, which swept ashore October 29, reduced its comparable-store sales growth by as much as 2 percentage points.
From July to September, household purchases contributed 1 percentage point to the economic expansion, which proceeded at a 2.7 per cent annual rate. The rate of economic growth for the past quarter will be revised up to 2.8 per cent when the commerce department issues updated figures on Thursday, according to the median forecast in a Bloomberg survey.
An improving housing market is supporting the economy. Residential construction has contributed to growth for six consecutive quarters, the best showing since 2005, as builders begin to restore the inventory of new homes.
After three consecutive gains, homebuilding took a breather last month, according to economists surveyed. Housing starts fell to 873,000 annual rate after reaching a four-year high 894,000 rate in October, economists project a commerce department report to show on Wednesday. Building permits, a proxy for future construction, probably rose to an 875,000 annual pace.
Homebuilder shares have been benefiting as a result. The Standard & Poor's supercomposite homebuilding index has climbed 17.7 per cent so far in the second half of this year, compared with a 3.8 per cent gain in the broader 500 Index.
Healing in the market for new houses is complementing progress in existing properties, which have benefited from mortgage rates near record-lows and rising home values. Sales of previously-owned homes probably rose to a 4.9 million pace, a three-year high, economists forecast a report from the National Association of Realtors will show on Thursday.
Orders for durable goods, those meant to last at least three years, climbed 0.5 per cent last month, commerce department data will show on Friday, according to the Bloomberg survey median.
* Bloomberg News
