Economy Watch: Retail Sales Eke Out December Gain

By Dees Stribling, Contributing Editor

The Census Bureau reported on Thursday that U.S. retail sales in December edged up only slightly compared with November, seeing an increase of 0.1 percent. That figure is adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, and wasn’t as much as economists had expected.

Take out auto sales, in fact, and retail sales actually declined by 0.2 percent month-over-month. But take out gas purchases, and overall retail sales would have gone up 0.3 percent (which is exactly the figure that most economists were predicting, according to Bloomberg). Mainly that seems to show that certain volatile retail sectors have a way of distorting broader measurements.

On the other hand, compared with December 2010, U.S. retail sales in December 2011 were up 6.5 percent, and retail sales in all of 2011 were 7.7 percent higher than during all of 2010. That’s the largest annual percentage increase since 1999, and some evidence that Americans who have the wherewithal aren’t nervous any more about making retail purchases. Also of note: brick-and-mortar retail trade sales in December 2011 were up 6.3 percent above the same month last year, while non-store retailer sales–catalog, but mainly Internet these days–were up 10.6 percent compared with December 2010.

Americans plan more travel spending in 2012

Are Americans planning to travel more in 2012, and spend more money doing it, thereby stimulating various parts of U.S. and overseas economies? Could be, according to the latest American Express Spending & Saving Tracker, which was released on Thursday. According to the survey, 81 percent of respondents plan to spend more or the same on leisure travel as they did in 2011. Among the “affluents” in the survey–those with a household incomes of more than $100,000 per year–86 percent plan to spend more or the same.

Lest anyone think that U.S. leisure travelers will be taking a lot of their spending money overseas, the survey says no. Despite the swell deals available in the euro zone these days (1 euro = $1.28 on Thursday; last summer it was around $1.45), only 22 percent of respondents to the AmEx survey are planning international trips, though 35 percent of the affluent are. Many more respondents–41 percent overall, 46 percent of the affluent–are planning to park themselves on a beach somewhere this summer, though those two kinds of destinations aren’t quite mutually exclusive.

Most respondents who plan to travel in 2012 will fly (77 percent), while 27 percent say they will fly more than last year, and 34 percent say they will fly just as much. Packing up the kids and driving to Yellowstone or Disneyland or the like is pretty much a relic of another era, if the survey is any guide. Nearly half of travelers with children under 18 have plans to travel without their children sometime in 2012, according to AmEx.

Euro debt has some takers

It turned out that investors did have an appetite for Spanish and Italian euro-denominated debt after all. On Thursday, investors bought 10 billion euro ($12.8 billion) worth of Spanish bonds–double the target–and yields on 12-month Italian debt dropped to 2.73 percent, down from the dangerous near-6 percent highs last month. One line of thinking has it that the cheap money lent to European banks last month by the European Central Bank, costing the banks a modest 1 percent, is being used to buy these bonds, and the banks are fairly certain that the EU (that is, Germany) won’t let Spain or Italy default. Thus, the banks get easy returns.

Initial U.S. employment claims for the week ending Jan. 7 were 399,000, according to the Bureau of Labor Statistics on Thursday, just shy of the dreaded 400,000 level, and up 24,000 from the previous week. The four-week moving average, which is less volatile, was also up, but only by 7,750, to 381,750.

Wall Street, perhaps more calm by the news from Europe than upset by the U.S. news, experienced a modest upward bounce on Thursday, with the Dow Jones Industrial Average up 21.57 points, or 0.17 percent. The S&P 500 gained 0.23 percent and the Nasdaq advanced 0.51 percent.