Economic news raises hopes for global recovery

Signs of a strengthening global recovery emerged Friday, with consumers boosting retail sales, companies restoring stockpiles and China's exports mounting a comeback.

The reports heightened hopes that consumers are starting to feel more comfortable about opening their wallets after months of building savings and reducing debt. Consumer spending, which drives most U.S. economic activity, is vital to a sustained rebound.

The encouraging retail sales report for November was a surprise. U.S. retailers have been reporting generally lackluster results for the start of the holiday shopping season. But sales rose 1.3 percent last month after a 1.1 percent October gain, the Commerce Department said. It was the healthiest advance since August. And it was more than double the increase that economists had expected.

Excluding autos, retail sales increased 1.2 percent - triple the expected gain. A 6 percent surge in sales at service stations, partly reflecting higher gasoline prices, led the overall gain. But even excluding that jump, retail sales posted a solid 0.8 percent rise in November.

Most economists have worried that high unemployment would depress spending and drag on the economy as it struggles to emerge from the worst recession since the 1930s.

"The labor market is showing signs of stabilization, and this is giving consumers greater confidence to spend a little more than they were earlier this year," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi in New York.

But other analysts cautioned that the economy still faces so many obstacles that consumer spending - and the economic recovery - are likely to be sluggish in the months ahead.

Also sparking optimism was a report Friday that U.S. businesses unexpectedly increased inventories in October, halting a slide of 13 consecutive declines. The small gain raised hopes that businesses will begin restocking depleted shelves, helping support the economic recovery.