Thursday, December 12, 2013

Economy: U.S. Retail - The Reality Check

(Drivebycuriosity) - Every year again the media tell us that the holiday retail sales would be bad this year. Every year we can read that consumers plan to cut back and consider to buy less than in the last holiday season. In most of the years they are wrong. So this year.

This morning we got a new reality check. In November U.S. retail sales climbed 0.7%, more than expected and more than in October (plus 0.6%). Sales were up 4.7% from November 2012 (bloomberg). It seems that U.S consumers are more optimistic and free-spending than the pessimistic media want to make us believe.

The strong numbers weren't´t really surprising. The negative prediction in the media didn`t make sense. The U.S job market is healing: Last month the U.S created 203,000 new jobs, continuing the positive trend of the months before, wages are rising and gas prices are falling. Therefore consumers have more money to spend.

Helpful are climbing home prices and the rally on the stock market. Both trends are lifting wealth of many Americans (wealth effect) which encourages them to spend more.

Rising retail sales are a boost for a lot of companies, not just for the retailers. Therefore the retail gains will translate into more jobs, more income and continue to support the economic growth.

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