Retail Sales Conceal Encouraging Detail -- Ahead of the Tape
January 14 2016 - 1:18PM
Dow Jones News
By Steven Russolillo
American shoppers didn't exactly splurge during the holiday
season, but they probably spent more than some pessimistic outlooks
suggest.
The headlines that come from the Commerce Department's December
retail sales figures, out Friday, aren't expected to be
particularly strong. Economists polled by The Wall Street Journal
estimate overall sales fell by 0.1% on the month, after rising 0.2%
in November.
Much of that expected decline was likely energy- and
auto-related, though. Gasoline sales have been sliding as pump
prices have gotten cheaper. And while 2015 was a banner year for
U.S. auto sales, December ended on a relatively weak note.
Amid ho-hum headline forecasts, predictions for the more
representative "control group" look much better. Items excluding
cars, gasoline and building-material and garden-supply store are
expected to rise for an eighth consecutive month. Economists
estimate the control group's sales rose 0.3% in December, according
to TD Securities, following a 0.6% rise in November.
Another reason for cheer comes courtesy of polling firm Gallup.
It surveys adults daily on how much they spent the day before,
excluding bills or major purchases. Though not adjusted for
seasonal factors, Americans' daily self-reports of spending
averaged $99 in December--the highest monthly average Gallup has
reported during the 6 1/2 -year economic recovery.
Cheap energy, a sturdy labor market and rising household wealth
have put more money in people's pockets. And while some of that
extra change is being retained--the personal-savings rate sits near
a three-year high--people also are spending some of that money
differently than in the past.
For instance, several retailers and department stores, including
Gap Inc. and Macy's Inc., were challenged in the holiday season by
high inventories, warm weather and lower spending from
international tourists reacting to a strong dollar.
But not all retailers suffered. Earlier this week, Lululemon
Athletica Inc. boosted its earnings outlook, quieting skeptics
about its holiday performance. And L Brands Inc., owner of
Victoria's Secret and Bath & Body Works, boasted about its
"best December ever" after sales at existing locations rose 8% from
a year ago.
The upshot: Retail sales should look better than the headlines
may suggest.
(END) Dow Jones Newswires
January 14, 2016 13:03 ET (18:03 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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