The Census Bureau announced that retail sales rose 0.5 percent in December, its fifth expansion in the past six months. Over the course of 2012, retails sales increased 4.7 percent, with some of its fastest growth stemming from the motor vehicle sector (up 1.6 percent for the month and 7.6 percent year-over-year). Other businesses with strong annual gains were nonstore retailers (up 12.6 percent), miscellaneous store retailers (up 9.9 percent), sporting goods and hobbies (up 9.1 percent), furniture and home furnishings (up 6.1 percent), and clothing and accessories (up 5.1 percent).
Overall, the key story centers on December’s decent gain in retail sales, and in particular, it suggests that growth in holiday spending was up modestly. This contrasts with reports elsewhere that said that holiday sales were weak, particularly at some stores. Indeed, the 4.7 percent year-over-year growth rate in retail sales was lower in 2012 than in either 2010 or 2011(7.0 and 6.6 percent, respectively).
With consumer confidence falling sharply in December and other headwinds from the fiscal cliff stalemate, the fact that consumer spending held up modestly was still a good sign, and the slower pace can easily be explained.
Chad Moutray is chief economist, National Association of Manufacturers.