December retail sales beat expectations.
The headline figure came in at 0.2% versus expectations for no change.
Core retail sales — ex-auto and gas receipts — climbed 0.6%
Expectations were for 0.3%.
That’s the good news.
On the other hand, core November sales were revised by half to 0.3%.
Auto sales fell 1.8%, while receipts from electronics stores fell 2.5%.
Year-over-year, December sales climbed 4.2%. The Wall Street Journal’s Paul Vigna puts this in context with a Tweet.
2013 retail sales: up 4.2%. 2012 retail sales: up 5.4% 2011 retail sales: up 7.5% See any pattern there?
— Paul Vigna (@paulvigna) January 14, 2014
But Capital Economics’ Paul Dales argues the data is better than it looks, and says they got weighed down by weather.
“…it looks and suggests that real consumption rose at an annualised rate of 4% in the fourth quarter…Sales of all other items rose by 0.7% m/m, although November’s 0.6% gain was trimmed to a 0.4% rise…Overall, this report supports our view that a 4% annualised rise in real consumption will help to generate a decent 3.0% gain in overall GDP in the fourth quarter of last year. That would provide a good platform for this year.”
BI’s Joe Weisenthal explains why this number is particularly important.
“We’ve seen a lot of retail industry blowups in recent days — companies pre-warning of quarterly results only to see their stocks tank….Meanwhile, WSJ was hinting last week that retail sales could be the kind of drag that could make the Fed think twice about an accelerated path to the exit.”