Economy Watch: Retail Sales See Christmas Boost
- Dec 29, 2011
After some worry that U.S. shoppers weren’t in such a jolly mood ahead of Christmas, at least in terms of how much they were willing to spend, it seems that on the whole retailers did well this holiday. At any rate, the unofficial retail numbers seem to be good.
According to ShopperTrak, retail sales for the week ending Dec. 24 were up 14.8 percent from the same week last year. Week-over-week, sales were up 37.8 percent. Stronger consumer confidence might have been a factor—earlier this week, the Conference Board reported a surprising spike in confidence. But the fact that Christmas Eve fell on a Saturday probably helped sales as well, as did the relatively warm and snow-free weather in parts of the country that typically see white Christmases.
Other observers of holiday sales patterns reported higher sales as well, though not quite as much as ShopperTrak. The ICSC/Goldman index, which is adjusted to weed out the influence of the calendar, found that chain-store sales for the week ending Dec. 24 were up 4.5 percent compared with last year. Separately, Redbook said that the year-over-year gain in U.S. retail sales for the week was 4.3 percent.
Economists moderately optimistic about 2012
The AP reported this week that a survey of economists undertaken by the news organization of 36 academic, private, corporate economists found that most of them believe that 2012 will be a better year for the U.S. economy than 2011. But not a hugely better year, and with a few caveats.
One major caveat is that most of the respondents don’t think that unemployment will fall very much, meaning that joblessness will remain a persistent ball-and-chain on the economy. The consensus among the economists surveyed is that the economy will create 177,000 jobs a month until the 2012 elections, up from 132,000 jobs a month this year. That’s not bad, but it isn’t enough to employ many of the unemployed.
Still, on average the respondents say that the U.S. economy will grow 2.4 percent during 2012, up from this year (current estimates put this year’s growth at a shade under 2 percent). But will Europe upset the American apple cart? The economists are oddly sanguine about that eventuality, seeing only an 18 percent likelihood that euro-zone problems will drag the U.S. into a new recession.
Italian debt cheaper, for now
For the moment, there was good news out of the euro-zone on Wednesday, with yields on six-month Italian debt dropping to 3.2 percent, and yields on 10-year debt down to 6.91 percent. Last week, the government of Prime Minister Mario Monti won final approval for some unpopular austerity measures, including tax increases and cuts in pension payments. On Thursday, Italy will see just how much faith investors have in these measures, with a new round of bond auctions
Despite the news from Italy, Wall Street couldn’t let an opportunity for a nervous sell-off go by on Wednesday, what with the talk of Iran disrupting the world’s economy, and so the equities markets took a dive. The Dow Jones Industrial Average lost 139.94 points, or 1.14 percent, while the S&P 500 was down 1.25 percent and the Nasdaq declined 1.34 percent.