Spending and Saving
January Shopping Surprise
If you’re like me, the holiday shopping season went a little like this: Get the gifts for family and friends, but instead of the usual “one for them two for me” approach (that’s a joke, Mom! Really, it’s a joke!) I had my eye on January for my personal shopping holiday.
For those who could afford it, the retail landscape portended a shopper’s dream: Bankruptcies were piling up (fire-sale prices!); breathless reports in the papers that merchandise that wasn’t moving (more fire-sale prices!). And everywhere you looked, more sale tags popped up (and if they didn’t, if you asked there was sometimes a hidden sale.)
When January came, the air was gloomy as the economy continued to spiral, but the sales were often so unbelievable, it was hard to resist a little spending. I bought hot winter boots for more than 50 percent off. I almost bought a fancy flat-panel TV for super-cheap from Best Buy. (The digital TV switchover delay slowed me down.) Friends were gabbing about the sales signs populating Saks Fifth Avenue.
Well, today the numbers have come in and it seems you were like me: According to the Commerce Department, total retail sales rose 1 percent in January, the first increase in seven months. Even better, they beat analysts’ expectations of a .08 percent decline.
This is great news for the economy – for the moment. Before you go changing your vote on our “When will the recession end” poll, though, be aware that more layoffs are expected through at least the first half of the year. Then, even the most awesome sales won’t be enough to draw consumers with more serious concerns on their minds.
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Before we get ahead of ourselves, let’s take a quick look at the “not seasonally adjusted” sales numbers…
I am typically not a big fan of seasonal adjustment factors and tend to agree more with year-over-year comparisons (i.e. Jan ‘09 vs. Jan ‘08). And right now, I trust those seasonal adjustment factors even less because those factors are based on recent economic trending. I think we can all agree that recent years are trending nothing like the upside-down economy we are in right now.
So without further commentary here are the last eight months of year-over-year growth rates in Retail Sales (ex. auto):
Jun: 1.3%
Jul: 3.2%
Aug: -1.1%
Sep: -0.2%
Oct: -4.8%
Nov: -11.3%
Dec: -9.4%
Jan: -10.5%
From the looks of things, there really was no rebound in retail. I don’t think the “for me” shopping and “firesales” gave us the boost that mainstream media is reporting.