Despite Media Reports to the Contrary: U.S. Retail Sales Are Actually Increasing, Not Falling
The Commerce Department today reported that: 1) total retail sales in December 2007 were 4.1% above December 2006, 2) sales for the 12 months of 2007 were up 4.2 percent% from 2006, and 3) total sales for the October through December 2007 period (QIV) were up 4.9% from the same period a year ago. All of those three measures suggest that retail sales are strong and healthy. But you would never know that from the media headlines:
December Retail Sales Slide 0.4% (WSJ)
US December Retail Sales Down 0.4% (CNN)
US Retail Sales Unexpectedly Declined in December (Reuters)
Consumer Spending Slowdown Deepens (AP)
US Retail Sales Fall in December (BBC)
Report Feeds Recession Worry (AP)
Reason: All of these reports focused on the decline in retail sales from November to December, which is actually fairly typical: In more than half of the last 8 years (5 out of 8), retail sales have either declined from November to December (2001, 2003, 2007) or remained flat (2000 and 2005).
Bottom Line: The chart above (click to enlarge) shows the annual growth in retail sales from the same month in the previous year, from 2001-2007. Over the last 18 months, there has actually been a positive, upward trend in retail sales, not a recessionary decline, see arrow above!