Retail sales perk up in holiday season

posted at 9:30 am on December 14, 2010 by Ed Morrissey

The news on the retail front is a little better than expected.  According to the Commerce Department, retail and food sales improved from October to November by 0.8% and 7.7% over last November.  Producer prices rose, but mainly on increased energy and food costs:

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for November, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $378.7 billion, an increase of 0.8 percent (±0.5%) from the previous month, and 7.7 percent (±0.7%) above November 2009. Total sales for the September through November 2010 period were up 7.8 percent (±0.5%) from the same period a year ago. The September to October 2010 percent change was revised from +1.2 percent (±0.5%) to +1.7 percent (±0.2%).

Retail trade sales were up 0.9 percent (±0.5%) from October 2010, and 8.1 percent (±0.7%) above last year. Nonstore retailers sales were up 14.2 percent (±3.1%) from November 2009 and auto and other motor vehicle dealers sales were up 12.8 percent (±2.5%) from last year.

We certainly can use a little good news as we head into the holiday season, but so far, it’s just mild to moderate good news.  The baseline for these improvements come from the recent nadir of the economy, and while 0.8% month-on-month and 7.7% year-on-year is positive, the pace leaves a long way to go to get back to big gains in consumption and expansion.  Part of this bounce comes from sales at gas stations, which rose 4% from October thanks to rapidly-rising gasoline prices, a warning of potentially inflationary fuel-price spikes down the road.

After gas stations, though, department stores, clothing stores, and sporting goods sales led the way with 2.8%, 2.7%, and 2.3% gains from October, respectively.  The holiday sales began early this year, and it looks as though consumers welcomed them.  On the flip side, auto dealer sales fell 1%, and electronics and appliance store sales fell 0.6%.  The poor housing markets certainly explains the drop in furniture and home furnishing sales (-0.5%), but one might assume that electronics store sales would improve in the Christmas season.

Still, we’re off to a good start for retail’s most critical eight weeks of the year.  Retail stores shed 9,000 jobs in November; perhaps the increased sales will restore some of the lost positions in December.


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Reporters finally get to say “As Expected?”

Elizabetty on December 14, 2010 at 9:34 AM

Heh. What a difference a restraining order election makes…

apostic on December 14, 2010 at 9:36 AM

But doesn’t this happen every year?

I mean. foregoing the stats for a moment, doesn’t retail and food, etc. jump this time every year? It’s good the jump is a bit bigger than last year, sure, but is this really news?

People (most people) create a ‘Christmas Fund’ so they have disposable income for the holidays. I do. They save all year so they can plop it down and have a nice holiday with their family.

Again, it’s good there is a jump, but not really a big deal IMO.

catmman on December 14, 2010 at 9:40 AM

rising gas prices will destory any recovery. already $3.00/gal is hurting consumer’s pocket’s wait until the inflation at the gas pump makes it’s way into food and services.

unseen on December 14, 2010 at 9:41 AM

So we see then that government stimulus spending worked as promised.

The government went out and hired hundreds of thousands of people, paid them lavish salaries and, voila, shops are doing brisk business this Christmas.

I’ll bet, however, that the shops doing well are largely located near Washington, D.C., and other cities where the federal government has a sizable presence.

As for me, I can report that my own Christmas spending decreased from $2,500 in 2009 to $175 in 2010. Reason: I’m not a government worker, thus I have no income of which to speak.

FlameWarrior on December 14, 2010 at 9:41 AM

Best Buy is not feeling the retail love. Down 15% this morning on a bad earnings report which included missing the top line by 5%.

WisRich on December 14, 2010 at 9:43 AM

I’m glad to see some good news. This year we’re having a great time with our Obamamas. Beans-n-franks for everyone!

Key West Reader on December 14, 2010 at 9:48 AM

Just wait to see the January numbers. People will be spending now, but if things tank in January (year to year) then this will be but a blip.

My mom is making us all Christmas presents this year. Which I welcome.

rbj on December 14, 2010 at 9:48 AM

Ed:

Per WisRich, these numbers are a farce and it is ridiculous to promote this propaganda …

Still, we’re off to a good start for retail’s most critical eight weeks of the year

… get educated in finance before propogating the lie:

http://market-ticker.org/akcs-www?post=174922

IrishSamurai on December 14, 2010 at 9:49 AM

Best Buy is not feeling the retail love. Down 15% this morning on a bad earnings report which included missing the top line by 5%.

WisRich on December 14, 2010 at 9:43 AM

Have you seen their weekly ads? Their prices suck. They have the occasional good deal on Blu-rays and video games, but you’d have to be nutz to buy a TV from them given what they’re charging.

Doughboy on December 14, 2010 at 9:50 AM

Trillions of dollars of borrowed money and this is a little good news. Folks, we are in a serious spiral and it will not end well.

wheelgun on December 14, 2010 at 9:51 AM

Best Buy is not feeling the retail love. Down 15% this morning on a bad earnings report which included missing the top line by 5%.

WisRich on December 14, 2010 at 9:43 AM

Probably those boneheaded “Holiday Elf” commercials have buyers looking elsewhere. I knew that campaign was going to implode the moment it first hit the airways.

pilamaye on December 14, 2010 at 9:52 AM

Percentage increases in sales are in and of themselves meaningless. The profit margins are weak (see Best Buy) and they’ll only be getting worse in 2011.

Mike Honcho on December 14, 2010 at 9:59 AM

Probably those boneheaded “Holiday Elf” commercials have buyers looking elsewhere. I knew that campaign was going to implode the moment it first hit the airways.

pilamaye on December 14, 2010 at 9:52 AM

“In the U.S., Best Buy’s same-store sales dropped 5%, while total sales fell 3% to $8.7 billion. The company estimated that its market share declined 1.1 percentage points, losing traction in TVs and gaming software, and it also expects its share for the year to decline.”

So it looks like I was right. Their TV sales suck thanks to their horrible prices. I’m surprised their gaming sales are weak, but then again Amazon and Toys R Us have been really competitive in that area lately.

Doughboy on December 14, 2010 at 10:01 AM

IrishSamurai on December 14, 2010 at 9:49 AM

Thanks, I knew it was bs the moment I read the headline. We rarely get the truth anymore. Just like the sh!tsandwich the Senate voted on yestereday. As with TARP, Obamacare, et al, when we eventually find out what the legislation contains, and it won’t reflect what’s truly needed. The polls on the bill reflect the disconnect from the Nov. 2 election.

mossberg500 on December 14, 2010 at 10:05 AM

I’ve been shopping more than normal……for cheaper cell service, electric service, cable service, internet provider, local gas stations, and for the best $1 heartattack burgers.

Limerick on December 14, 2010 at 10:13 AM

IrishSamurai on December 14, 2010 at 9:49 AM

I have the gross numbers (unadjusted) too, and they show increases:

Nov 2010: $377.5 billion
Oct 2010: $365.5 billion
Nov 2009: $345.7 billion

Best Buy might be tanking for other reasons, but there isn’t any conspiracy to tweak the numbers by using percentages. Of course margin matters, and if retailers are too steeply discounting to get these sales, it will show up later in the bottom line. It seems as thought the pressure to do so is less this year than last, though.

Good sales numbers aren’t everything, but they still are a good sign, even mildly improved numbers. Let’s not get carried away with our pessimism.

Ed Morrissey on December 14, 2010 at 10:19 AM

So the stats were scrubbed and ‘corrected’ for everything but price increases?

Sounds like more “progressive math”.

That people are ‘spending more’ doesn’t necessarily mean they’re ‘getting more’.

$3.30/gallon here.

GarandFan on December 14, 2010 at 10:21 AM

I’ve been shopping more than normal because I’m emulating our Fair First Lady who has made shopping into an art form. To the tune of I Could Have Shopped All Night:
http://www.youtube.com/watch?v=d5YjuVwQIBI
Remember, every time you “like” me an angel gets its wings.

No Niks on December 14, 2010 at 10:24 AM

Good sales numbers aren’t everything, but they still are a good sign, even mildly improved numbers. Let’s not get carried away with our pessimism.

Ed Morrissey on December 14, 2010 at 10:19 AM

The S&P is currently trading at 13.8 times projected 2011 earnings ($90). If those earnings materialize, look for the market to gain at least 30%.

RedWinged Blackbird on December 14, 2010 at 10:34 AM

I don’t pretend to be an econ expert, but it seems logical to me that sales at the retail outlets that are still open are up because there are fewer places to shop. We have seen some big players leave our market in SW Florida, and LOTS of smaller shops have gone dark.

Sadly, we just lost our Sonic Drive-In Restaurant too. The perfectly greasy burgers delivered by smiling roller girls is a simple pleasure I’ll surely miss. :(

ornery_independent on December 14, 2010 at 10:35 AM

Rising food costs will certainly increase the gross sales numbers rather than quantity.

I heard this morning, on some news show, that electronic item sales are down.

Kermit on December 14, 2010 at 12:00 PM

Don’t buy the msm hype. They prey on mass economic illiteracy.

For some truth go to this Denninger post…

November Retail Sales and PPI: Blech

The msm must serve their corporate masters. Lying is one they do that. In order to perpetuate the ponzi/bubble economy the must lie to you to separate you from your money.

voiceofreason on December 14, 2010 at 12:08 PM

Correction…

Lying is one WAY they do that…

voiceofreason on December 14, 2010 at 12:11 PM

Good sales numbers aren’t everything, but they still are a good sign, even mildly improved numbers. Let’s not get carried away with our pessimism.

Ed Morrissey on December 14, 2010 at 10:19 AM

..exactomundo. especially if the American public can be made to connect the dots: November 2nd –> (eventual) retention of the Bush tax rates (it’s not a tax cut, folks) –> job growth –> better economy over.

Add in a rollback/repeal of health care and the Dem stimulatio for an even more robust recovery and it will be hard for Dems to make the argument they knew what was going on when they had control.

The War Planner on December 14, 2010 at 12:19 PM

Good sales numbers aren’t everything, but they still are a good sign, even mildly improved numbers

Increased numbers is just inflation … nothing more. Compare margin which is the point (and why Best Buy is getting monkeyhammered today) …

You’re parroting BAD economic news as good news simply because the 2010 numbers are higher than the 2009 numbers … guess what … even in 2011, the revenue numbers will be higher than 2010 … because inflation will be raging by the 2nd or 3rd quarter of next year …

Sorry to offend, but promoting the economic illiteracy in this country by carrying the administration’s bad economic numbers as “good” is why we’re in the malaise we’re in …

IrishSamurai on December 14, 2010 at 12:29 PM

Let’s not get carried away with our pessimism.

This is the problem with why we cannot shake the economic malaise … the truth is not pessimism. The truth just is.

The facts are that the FED (Ben Bernanke) and the administration are trying to paper over the economic DEPRESSION we’re currently experiencing due to MARGIN COMPRESSION … same as what happened in the Great Depression and follows Von Mises’ “Credit Boom/Bust” theory …

There is only one way out of this mess and ignoring economic reality because it is “too pessimistic” isn’t the answer.

IrishSamurai on December 14, 2010 at 12:32 PM

Good sales numbers aren’t everything, but they still are a good sign, even mildly improved numbers. Let’s not get carried away with our pessimism.

Ed Morrissey on December 14, 2010 at 10:19 AM

I worked in retail management off and on for years and these figures are nothing to brag about. You’re right, sales numbers aren’t everything and most retailers have higher costsa this time of year due to temp help, longer hours, and other overhead increases. Plus the bottom line may be awful if there was alot of deep discounting since wholesale prices have increased. It would be interesting to see which retailers had the biggest increases and which are still tanking.

Deanna on December 14, 2010 at 1:15 PM

Okay, Abercrombie and Fitch, JC Penney’s, Gap which includes Old Navy and Banana Republic, Macy’s, Nordstrom, Kohls, Target, and Costco all showed increases in November. Haven’t seen the results for Walmart but I know their USA sales were down and their international sales were up in October.

Deanna on December 14, 2010 at 1:31 PM

Deanna, Yup. Food and clothing stores. I expect their sales to be UP. 2 of the 3 essentials. The key here is that electronics sales are down. A realistic evaluation of that segment might lead one to some honest conclusions.

Either kids have all the gadgets they want or need, or they are still too expensive (or not available), or People are doing without because they have no money. Or (and I hate to think this) theres no more innovations in the markets.

We got a tv in Sept only because the old one became unusably green. And my kids already have all the ‘tronics they want. And I am still using a 6 year old laptop.

orbitalair on December 14, 2010 at 2:04 PM

rising gas prices will destory any recovery. already $3.00/gal is hurting consumer’s pocket’s wait until the inflation at the gas pump makes it’s way into food and services.

unseen on December 14, 2010 at 9:41 AM

This. Has anybody else noticed food prices going up? Semss like a lot of items in the grocery sores and Costco are up a dollar or more per item lately.

trigon on December 14, 2010 at 3:00 PM

*seems and *stores. When will we ever get an edit function?

trigon on December 14, 2010 at 3:01 PM

I’ve been shopping more than normal……for cheaper cell service, electric service, cable service, internet provider, local gas stations, and for the best $1 heartattack burgers.

Limerick on December 14, 2010 at 10:13 AM

For your TV viewing look into Roku. Pay $59 for the box, then just $17/mnth to stream Hulu and Netflix to your TV. You’ll pay just over $200 per year versus paying over $500 for cable. I don’t represent Roku, but I have done the research and it looks like a keeper….

jbh45 on December 14, 2010 at 3:02 PM

electronics and appliance store sales fell 0.6%

Even with cash for caulkers?

—————–

Cannot wait for the revision of this number.

CWforFreedom on December 14, 2010 at 7:10 PM