Retail sales came in at $729.2 billion in December, a gain of +0.4% for the month. This was below the streets expectations of a gain of +0.6%. But still another record high. Novembers results were revised higher as well.
Retail sales are up 3.9% over last years results, a modest slowdown from last months 4.1% pace of growth. But right in line with the average trend over the last couple years.
Core retail sales (retail sales excluding autos) came in at $586.2 billion, for a gain of +0.4% in December. Core sales also missed street expectations, which were for a gain of +0.5%.
Core sales are +2.9% higher than last year, down from last months annualized growth rate of +3.4%. But like total retail sales, it remains within its average trend over the last few years after the COVID spike.
Real retail sales (total retail sales adjusted for inflation) remained at $229 billion in December. And has gone nowhere for 3 years now. What this means is that the record dollar amount in total retail sales is 100% related to price increases. Consumers demand for goods has not increased at all.
10 of 13 retail sales category’s showed gains for the month of December. Led by miscellaneous store retailers (online), while building materials & gardens etc. was the biggest laggard.
11 of 13 retail sales category’s gained for the year. Led by autos and furniture, while building materials and energy were the lone decliners.
Taking a quick look at how consumer stocks are trading this morning, the consumer discretionary index (XLY- think Amazon, Tesla, Home Depot, Starbucks, etc.) is down about 0.75% this morning as I type this. So far the uptrend line (red line) is supporting the price on the pullback of about 10% from its December highs. While consumer staples is down about 0.40% so far today. Consumer staples are those companies that sell products that people buy no matter what the economy is doing. For example, Walmart, Costco, Colgate-Palmolive, and Target are some of the biggest names in the index. It’s seen weakness relative to the market, with a lower high in December, and then rolling over below the 50 and 200 day moving averages to start the year. Hitting its next downside targets this morning, the staples sector has now retraced about 50% of its rally off the 2022 lows.Weakness in the defensive names means investors are still relatively risk seeking. You usually see the defensive sectors of the market outperform when investors are “bracing for impact”.More By This Author:Financials Get Q4 Earnings Off To A Good Start U.S. Dollar And Rates Pullback After Core Inflation Beats Expectations Small Business Optimism Continues Surge, Hits 6 Year High