The holiday season offered a mixed bag for retailers, with the government reporting Wednesday a decline in overall sales while a key trade association said sales hit their mark last month.
Retail sales as reported by the Census Bureau fell in December by an unexpected 0.9 percent, baffling economists who expected growth given the strong hiring numbers last month and a sizzling revision to economic growth estimates. Although they were down from November, retail sales broadly were up 3.2 percent over the same month of 2013.
Within the numbers, the retail trade component of retail sales fell 1.1 percent in December over November but rose 2.6 percent over the same month of 2013. Auto sales were up 9.8 percent over December 2013 and food services and bars saw sales increase 8.2 percent over the same month of 2013.
“We do not believe the consumer is pulling back and we think this report paints a very misleading picture of consumer spending at the end of 2014,” economists at RDQ Economics in New York wrote in a note to investors. “Consumer real income growth in December was likely solid as a result of the decline in gasoline prices, job creation finished the year on a fairly strong note and we firmly believe this will translate into stronger consumer spending growth.”
Shrugging off the weak December number, the National Retail Federation on Wednesday announced its holiday sales numbers. It found that sales in November and December increased 4 percent to $616.1 billion. That was in line with the group’s projected forecast of 4.1 percent growth for holiday sales. Non-store holiday sales, a measure of online and e-commerce transactions, grew 6.8 percent to $101.9 billion over the same two months.
“Today’s holiday retail sales results are welcome news for our industry and for our economy,” said Matthew Shay, president of the National Retail Federation. “There is every reason to believe that we have moved well beyond the days of consumer pessimism and that the trajectory for retailers continues to point up.”
The group’s chief economist was optimistic for 2015.
“While December’s (Census) figures are disappointing, holiday sales in 2014 are the best we've seen since 2011,” said Jack Kleinhenz, in a statement. “We remain positive about the future and expect to see consumers continue to benefit from the extra income gained from an improved job market and the dramatic fall in gas prices.”