Today we get retail sales for December.
The consensus is that excluding auto sales, retail sales grew about 0.4% in December.
This is always an important number, since it’s one of the most direct measures of the health of the consumer. But you have to pay especially close attention to it this time.
In part because we’ve seen a lot of retail industry blowups in recent days — companies pre-warning of quarterly results only to see their stocks tank.
On Monday, Lululemon Athletica and Express became the latest retailers to warn investors of disappointing earnings in the holiday quarter. These negative forecasts follow similar warnings last week from a range of retail companies, includingAmerican Eagle Outfitters and Zumiez. In response, Lululemon stock shed 16 per cent and Express shares dropped about 2.5 per cent.
In a release Monday, Lululemon’s CFO said the company had seen “traffic and sales trends decelerate meaningfully” since the beginning of January. Because of that, Lululemon cut its net revenue forecast and revised its fourth-quarter guidance from flat same-store sales to a decline in the low-to-mid-single digits.
Meanwhile, the CEO of Express said the specialty retailer had “a drop in traffic that was even deeper than anticipated as consumers waited until much closer to Christmas to shop.” To draw them, Express extended and deepened discounts — a promotional environment it expects to maintain amid what it sees as “weak” January traffic.
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.
So we’ll see at 8:30 what’s going on exactly. Remember, the general consensus right now is that the US economy is still heading for “escape velocity” and that 2014 will be the best year since the crisis. But the December Jobs Report has shaken folks a little bit and suddenly this kind of high-stakes data is more interesting.