Retail sales numbers for January came out today and were surprisingly strong. Here are few things to think about in reviewing the numbers:
First, anyone who hasn’t lost a job over the past two years is probably feeling that they aren’t going to lose their jobs. The fear factor in the economy is ebbing, so those with jobs are spending a bit more.
Second, the retail numbers are unlikely to signal much good news for the unemployed — at least not for a long while. Calculated Risk notes that the four-week running average for weekly unemployment claims is rising, with the average now 28,000 above the January low: “Both the level of claims, and the recent increase in the 4-week average, are concerning and suggest continued job losses.”
And finally, I can’t help but wondering when and whether these numbers will translate into higher tax receipts for states. So far, retail sales numbers and tax receipts aren’t in sync. Gotta keep an eye on that. The numbers, for example, don’t take into account store closings.
Here’s the top of the Wall Street Journal story on January retail sales; click on the link at the bottom for the full story:
Retailers continued their comeback last month, with long-suffering categories like department stores and apparel retailers showing signs that consumers are returning.
January same-store sales rose 3.3%, according to the 29 publicly traded retailers tracked by Thomson Reuters. The monthly gain, the strongest since April 2008, exceeded projections for a 2.5% advance at stores open at least a year and followed a 2.9% rise in December.”I think we're seeing that customers came out after Christmas and stayed out,” said Janet Hoffman, global managing director for retail at consulting firm Accenture. “Retailers are doing a significantly better job at managing inventory. So the markdown frenzy we saw last year didn't occur,” which will help profit, she said.
Graphic from Calculated Risk