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  • Retail Sales Rose 7.7 Percent in 2011

    Retail sales rose only slightly in December, according to the Commerce Department . Adjusted for seasonal and holiday variation, sales rose 0.1 percent from November. The numbers look better in comparison with December 2010, as sales this year were 6.5% higher. For the year, sales in 2011 outpaced sales in 2010 by 7.7 percent. From the Census Bureau : Read the full release here .

  • Black Friday Retail Sales Rise Only Slightly, But Overall Data Encouraging

    ShopperTrak reports that sales at retail outlets increased 0.3% on Black Friday 2010 over Black Friday 2009. Not exactly a sharp increase--the increase from 2008 to 2009 was 0.5%. But when you take a look at other factors, there is a lot for retailers to like about holiday shopping so far: ShopperTrak's data shows early holiday sales and door buster promotions impacted Friday's performance as the company saw some unexpected strength in early November - as sales and traffic for the first two weeks of the month through Nov. 13 increased 6.1 and 6.2 percent respectively versus the same two week period in 2009. ShopperTrak founder Bill Martin says this early boost could impact retail performance beyond Black Friday and into the weeks leading into Super Saturday. "Retailers were very conscious of driving traffic early in November and in doing so some might have thinned Black Friday spending a bit," Mr. Martin said. "The reality is we have a deal driven consumer in 2010 and that consumer responded to some of the earliest deep discounts we've even seen for the holidays. Additionally, a percentage of retailers concentrated on pushing folks to their Websites with various online only sales which most likely influenced Black Friday performance as well." Martin continued: "That being said, we still saw a record amount of money spent on Friday so it's hard to say Black Friday wasn't a success, it's just not the success we saw in the mid 2000's when the day really became a phenomenon with the American public. And if retailers continue the pattern of early sales and online promotions, this could be the new norm in Black Friday performance." While sales were essentially flat, ShopperTrak reports total U.S. foot traffic increased 2.2 percent on Black Friday which points to a shopper driven by various sales and promotions. Read the full release here . Meanwhile, online shopping seems to be doing exceptionally well this year. EBay and PayPal report that sales doubled on Black Friday (see TechCrunch ). And Bloomberg is reporting that a big day today, Cyber Monday, could push online sales for Thanksgiving weekend over $1 billion for the first time .

  • Retail Sales Trend Lines, from Tim Duy

    The Commerce Department announced yesterday that retail sales had improved 1.2% in October. Commerce Secretary Gary Locke stated that the increase was higher than anticipated, and it was widely reported as a good sign for holiday shopping . University of Oregon economist Tim Duy took a look at the data, and shares the following graphs: And since auto sales were a major driver of the October numbers, here's a look at the data excluding them: Duy's conclusion: In general, the retail sales report was good news, as it is another indicator that drives a stake into the heart of the double-dip story. But keep in mind that the data continues to illustrate the good cop, bad cop conflict in the economy. Policymakers should be concerned about the distance between new trends and old, lest they risk falling into the trap of diminished expectations, believing that 9% unemployment should be the new normal. Market participants, however, may simply be content with confirmation that the foundation for ongoing corporate revenue growth remains secure. Read Duy's Quick Note on Retail Sales at Economist's View, here.

  • Retail Sales Down From April, But Up from May, 2009--Who is Buying?

    The latest data from the Commerce Department shows that retail sales dropped 1.2% from April to May. As the Wall Street Journal's Justin Lahart and Rachel Dodes note , that's the first monthly drop since last September. The year-to-year data looks more positive. Here's the percent change in retail and food sales from the Census Bureau : So who has been driving that 7.9% jump in sales over the last year? According to a recent Gallup survey, it is wealthy Americans and elderly consumers. While daily spending among lower- and middle-income Americans has stayed just below $60, on average, for the last year, upper-income Americans show a different pattern. From Gallup: Perhaps more surprising is the increase in spending among elderly Americans. Consumer 65 and over went from spending, on average, $44 in May, 2009, to spending $64 a day on average in May of 2010. Read more from Gallup here .

  • Small Business Owners' Optimism Climbing, But Hiring is Stagnant

    Optimism among small business owners continued to climb in May, according to the National Federation of Independent Business . The NFIB's Small Business Optimism Index is now at 92.2: The survey saw improvement in seven of the ten index components. One area that remains low is small business owners' optimism on the labor markets. William Dunkelberg and Holly Wade , the report's authors, write: Nine percent (seasonally adjusted) reported unfilled job openings, down two points and historically very weak. Over the next three months, seven percent plan to reduce employment (unchanged) and 14 percent plan to create new jobs (unchanged), yielding a seasonally adjusted net one percent of owners planning to create new jobs, two points better than the April reading. Since the third quarter of 2009, job creation plans have seriously underperformed the recoveries from the other two deep recessions covered by the NFIB survey. Coming out of the milder 1991 recession, construction added more than 100,000 jobs and 20,000 new firms in a year's time. If small businesses are the driver for job creation, this survey doesn't suggest a significant turnaround soon. Read the full report here .

  • More Improvement in NFIB's Small Business Optimism Index

    Small business owners remain skeptical about economic recovery, but they are showing signs of more optimism--or at least less pessimism--according to the National Federation of Independent Business . The NFIB's Small Business Optimism Index has topped a reading of 90 for the first time since August of 2008: William Dunkelberg and Holly Wade , the report's authors, find very little positive in their reading of the data. But one area that stands out is sales, where they see marked improvement: The net percent of all owners (seasonally adjusted) reporting higher nominal sales in the past three months improved 10 points to a net negative 15 percent, still negative but a huge improvement. It is the best reading since September 2008. The net percent of owners expecting real sales gains gained nine points, increasing to six net percent of all owners (seasonally adjusted). Small business owners continued to liquidate inventories and weak sales trends gave little reason to order new stock. A net negative 18 percent of all owners reported gains in inventories, 10 points better than December’s record liquidation reading. Plans to add to inventories improved five points to a net negative two percent of all firms (seasonally adjusted). Read the full report here .

  • Commerce Dept: Retail Sales Up in March

    The Commerce Department has released data on retail sales for March, and the monthly and yearly trends are positive: The advance estimates from Commerce show total US retail and food sales at $363.2 billion for the month. That's up 1.6% from February, and up 7.6% from March, 2009. Even self-proclaimed pessimist, and Fed watcher, Tim Duy is upbeat about the data. He writes--in his regular column at Economist's View --that the data "should dispel any lingering concerns that American consumers remain huddled in their basements, clutching a bar of gold with one hand and a loaded shotgun with the other." Read his analysis of this data and the impact it should have on the Fed's outlook here . And read the Commerce Department's release here .

  • The Decline of the Personal Savings Rate

    The personal savings rate in the US, (measured by the Bureau of Economic Analysis ), has dropped to 3.1%. Edward Harrison , who has been following the personal savings rate over the last couple of years at Credit Writedowns , believes that there is a "strong correlation" between asset prices and savings rate. He argues that when asset prices go up, the savings rate goes down. And since asset prices have "skyrocketed," Harrison is not surprised by the drop in the savings rate. But, he says his is one of three possible explanations for the savings rate dropping from last spring's high of 6.4%: 1) Asset prices are increasing. The wealth effect and the decrease in debt-related stress associated with this increase has allowed consumers to resume their prior consumption patterns. This is where I have focused in the past. 2) Debt-related stress is still acute, particularly because of continued high rates of unemployment. This has caused consumers to draw down savings in order meet basic material needs. 3) A surge in strategic defaults has left consumers with more money to spend and is boosting retail sales. Read Harrison's detailed analysis of the Three potential explanations for the continued fall in US savings rate here .

  • Black Friday Stats and Consumer Confidence

    Black Friday is always a day ripe for hype and wide-though predictable-television coverage. But the last two Black Fridays seem to have attracted even more speculation, and anxiety, than usual. So it is impossible to resist looking at some of the numbers that are coming through today. The takeaway seems to be that there were more people shopping this Black Friday than last year, but they spent less. So the overall take by retailers was higher, but not by much. Andrea Chang shares some of the key stats in today's LA Times : Sales on the day after Thanksgiving rose just 0.5% to $10.66 billion, according to ShopperTrak RCT Corp., a research firm that monitors sales at more than 50,000 stores. That compared with a 3% year-over-year Black Friday increase in 2008 and an 8.3% surge in 2007. "It's a positive sign that we had an increase in sales, but the numbers certainly don't indicate that those will be sustained," said Britt Beemer, chairman of consumer behavior firm America's Research Group. Nationwide, 195 million shoppers visited stores and websites over the four-day weekend, up from 172 million last year, the National Retail Federation said Sunday. But average spending fell 7.9%, to $343.31 per person, from $372.57 a year ago. Total spending reached an estimated $41.2 billion. The resistance to making big purchases is no surprise to the folks at The Big Picture , where, before any Friday stats came out, David Rosenberg shared the below chart and stressed that consumer frugality is alive and well: Rosenberg writes: The Conference Board’s consumer confidence index may have improved (48.7 in October to 49.5 in November) and beaten consensus expectations, but it remains firmly in recession terrain. It is so obvious that consumers are tired of the over-borrowing and over-spending days of yesteryear. Despite all the temptations provided by the government, auto buying plans dropped to an eight-month low (from 4.7 in October to 4.4 in November); home buying plans slipped to a new 27-year low of 2.3 (from 2.5 in October and 3.0 in September); and intentions to buy a major appliance stayed at a 14-year low (23.2). Read Consumer Confidence in the Doldrums here .

  • Surowiecki: Price Wars are 'the retail version of the doomsday machine'

    James Surowiecki 's Financial Page column in this week's New Yorker is a keen look at price wars as a high stakes game of chicken. He goes back to the airline industry's destructive price wars of the early 90s to shed light on the current Amazon-WalMart showdown . Surowiecki writes that there is only one way to win a price war: don't play. Instead, you can compete in other areas: customer service or quality. Or you can collude with your putative competitors: that’s why cartels like OPEC exist. Or—since overt collusion is usually illegal—you can employ subtler tactics (which economists call “signalling”), like making public statements about the importance of “stable pricing.” The idea is to let your competitors know that you’re not eager to slash prices—but that, if a price war does start, you’ll fight to the bitter end. One way to establish that peace-preserving threat of mutual assured destruction is to commit yourself beforehand, which helps explain why so many retailers promise to match any competitor’s advertised price. Consumers view these guarantees as conducive to lower prices. But in fact offering a price-matching guarantee should make it less likely that competitors will slash prices, since they know that any cuts they make will immediately be matched. It’s the retail version of the doomsday machine. Read Priced to Go here .

  • Small Business Optimism Index Dips

    After climbing steadily over three months, the Index of Small Business Optimism dropped a point in June. Here's a look at the trend from the National Federation of Independent Businesses (NFIB): And here's what NFIB's William Dunkelberg and Holly Wade see as one reason for the decline: Expected sales declined from the month prior--it was one of six components in the index to drop from the previous month. All in all, the authors read relatively optimistic: The economy is bouncing along the bottom and reorganizing itself to restart the growth process. Many indicators, including NFIB’s, are now headed up. They are still in “negative” territory, but will soon break the surface and become positive. The labor market indicators seem to be finding a foothold, even if a bit slippery. Based on the June numbers, the unemployment rate is expected to head down to 8.8 percent over the next three months, consistent with a return to growth in the third quarter (as predicted last year). Read the report here .

  • Retail Sales Drop in March; Producer Prices Drop As Well

    The Commerce Department released disappointing retail sales figures today showing that sales dropped 1.1% in March after a 0.3% gain in February. According to Bloomberg , auto sales led the way (down), but almost every sector saw decreased sales: Autos sold at an average 9.5 million annual rate in the first quarter, the weakest performance since 1982. General Motors Corp., the largest U.S. carmaker, may be forced to file for bankruptcy in the event it can’t reach accords with labor and bondholders for $13.4 billion in federal aid. In addition to electronics stores and restaurants, sellers of furniture, building materials, clothing, and sporting goods all posted declines. The 1.4 percent decrease in receipts at restaurants and bars was the biggest since March 2005. Only grocery and health-care stores saw an increase in sales last month. Read the full article here . Prices declined last month as well. The Labor Department reports this morning that U.S. producer prices dropped 1.2% in March. The year-to-year drop from March 2008 was 3.5%--the biggest decline since 1950. The primary reason appears to be a drop in energy prices. From Reuters : Core producer prices, which exclude food and energy costs, were unchanged in March compared with a forecast for a 0.1 percent rise. The core producer price index stood 3.8 percent higher measured against the same month last year. The Labor Department noted that among finished goods, energy prices turned down by 5.5 percent last month after rising 1.3 percent in February. They were 25.4 percent lower on a year-over-year basis. Gasoline prices fell 13.1 percent in March and were 50.7 percent lower compared with a year ago. Full article here .