Sales at U.S. Retailers Seen Bringing Holiday Cheer to End 2017By
Americans probably brought the holiday spirit in abundance to retailers last month, marking a strong finish to 2017.
Receipts climbed another solid 0.5 percent in December after a 0.8 percent jump a month earlier that reflected broad-based gains, according to the median projection in a Bloomberg survey of economists before Friday’s release from the Commerce Department. Compared with a year earlier, sales in November were up 5.8 percent, the most since March 2012.
What Our Economists Say“Retail analysts will watch to see if favorable economic news, solid readings on consumer confidence/sentiment and public enthusiasm for the passage of the tax-reform bill are having a substantive impact on consumer buying patterns -- discretionary spending in particular.”
-- Carl Riccadonna and Yelena Shulyatyeva, Bloomberg Economics
The government’s data on Friday are preceded by weekly indicators that have shown sturdy holiday-consumption patterns at merchants. The Retail Economist-Goldman Sachs index of retail sales advanced 3.3 percent in the week ended Dec. 23 compared with the same period a year earlier. Separate figures from Johnson Redbook showed a 5.7 percent increase that same week, the most since July 2014.
“2017 holiday sales on a seasonally-adjusted basis from the last week of October through the final week before Christmas posted their strongest growth since the 2012 holiday season, based on the TRE-GS weekly index,” Michael Niemira, chief economist of The Retail Economist LLC, said in a Dec. 27 statement.
Elevated household confidence and hiring are putting a spring in consumers’ steps. Nonetheless, while the economy continues to be underpinned by steady consumer outlays, paychecks aren’t stretching very far. That could explain a recent pickup in credit-card balances as reported by the Federal Reserve.
In November, revolving debt posted the largest gain in a year, suggesting a good part of the jump in retail sales during the month was financed. The risk to the economy this quarter is that households, many of whom face higher home-heating bills, will temper their spending as they work off their credit-card balances.