The government reported yesterday that retail sales across the nation rebounded sharply in November, showing the economy is performing more robustly than expected, despite forecasts that a recession is coming.
Overall consumer buying levels rose a hefty 1.8 percent over the month, the department reported, erasing a 1.7 percent decline in October that had been cited as evidence that the downturn had begun in earnest.
Moreover, the revival was visible in a broad range of industries and sectors from automobile sales to department store transactions. Total sales levels for November were $76.99 billion, up from $76.93 billion in October.
The rebound added to the dilemma of the Carter administration, which must decide this week or next whether to include an anti-recession tax cut in the January budget but is reluctant to move without the slump actually underway.
Key Carter economic policymakers, headed by Treasury Secretary G. William Miller, outlined a series of policy options yesterday to House Speaker Thomas P. O'Neil (D-Mass.), but reportedly gave no hint of any decisions.
Most top Carter advisers are leaning against a traditional broad-scale tax cut for it would exacerbate inflation. The choices now seem to be between cutting Social Security and business taxes and holding firm until summer.
The pickup in retail sales surprised some economists, many of whom had expected to see consumers retrenching by now in the wake of the widespread drawing down of savings-account balances last quarter.
Nevertheless economists weren't prepared yesterday to alter their forecasts on the basis of the employment and sales figures. "We still believe a downturn is coming," said William A. Cox, the Commerce Department's deputy chief economist.
At the same time, Thomas A. Murphy, chairman of General Motors Corporation forecast "substantially higher levels" of auto sales next year "assuming, of course, the avoidance of gasoline availability problems."
The rebound in retail sales was spread through both the durable and non-durable goods sectors of the economy. Durables, which include auto sales, climbed 1.9 percent, while non-durable rose 1.8 percent.
Excluding autos, overall retail sales jumped 1.4 percent in November.