Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  Retail Sales Rose 0.6% in December
Posted Under: Data Watch • Government • Inflation • Markets • Retail Sales • Fed Reserve • Interest Rates
Supporting Image for Blog Post

 

Implications:  Retail sales beat expectations in December, rising 0.6% for the month, while nine of the thirteen major categories moved upward.  The gains in December were led by sales at non-store retailers, which rose 1.5% for the month and are up 9.7% in the past year, followed by sales for autos (+1.1%), and at general merchandise stores (+1.3%).  The largest decline was once again at gas stations, which is not a bad thing as prices at the pump have come down significantly since earlier this Fall.  “Core” sales, which exclude volatile categories such as autos, building materials, and gas stations – crucial for estimating GDP – increased 0.6% in December and were revised slightly higher for previous months.  These sales were up at a 5.8% annual rate in Q4 versus the Q3 average.  Plugging today’s data on retail sales and other reports into our models suggests real GDP grew at about a 2.0% annual rate in the fourth quarter.  The problem remains that one of the key drivers of overall spending is inflation.  Yes, retail sales are at record highs unadjusted for inflation, but in “real” (inflation-adjusted) terms, they have been stagnant.  Real retail sales peaked back in April 2022 and have since declined by 1.9% from that peak.  It has been forty years since the US had an inflation problem, so it is important to remember that it can distort data.  Our view remains that the tightening in monetary policy since last year will eventually deliver a recession.  Expect more deterioration in real retail sales into 2024 as tighter credit conditions along with higher borrowing costs take their toll.  In other news this morning, import prices were unchanged in December while export prices fell by 0.9%.  In the past year, import prices are down 1.6% while export prices are down 3.2%, a sign of the tightening of monetary policy versus a year ago.

Click here for a PDF version

Posted on Wednesday, January 17, 2024 @ 10:50 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.