Report: Retail Sales Set Record in 2011
Retail sales barely rose in December, but the gain was enough to lift sales to a record level for 2011. It marked the largest annual increase in more than a decade.
Sales inched up 0.1% in December to a seasonally adjusted $400.6 billion, The Commerce Department said today (Jan. 12). It was the second straight month that sales have topped $400 billion. Never before had monthly sales reached that level, The Associated Press reported.
The government revised the November sales to show a stronger 0.4% gain — twice the original estimate. That pushed sales in November above $400 billion on a seasonally adjusted basis.
For all of 2011, retail sales totaled a record $4.7 trillion, a gain of nearly 8% over 2010. It was the largest percentage increase since 1999
Steady sales gains have fueled a 20% surge from the low during the recession. Monthly sales are even 6% above their pre-recession high.
The figures confirm evidence that the economy was strengthening as 2011 ended.
One caveat: Many retailers said they had to offer steep discounts in December to attract holiday shoppers.
Those discounts showed up in weaker department store sales. They fell 0.2% in December. A broader category that includes department stores like Macy’s and big chains such as Wal-Mart and Target showed an even larger decline last month: 0.8%.
“Although consumer spending is not particularly robust, households do continue to spend and provide moderate support for the overall economy,” said Steven Wood, chief economist at Insight Economics.
The strength last month was led by a 1.5% jump in auto sales. Furniture store sales rose 1%. Hardware stores reported a 1.6% increase. But sales at electronics and appliance stores sank nearly 4%.
Sales at gasoline stations fell 1.6%. That decline reflected mainly lower gas prices. Excluding gas stations, retail sales would have risen 0.3% in December.
Restaurants and bars did better over the holidays. Their sales rose 0.7%.
The government’s retail sales report is its first look each month at consumer spending, which accounts for roughly 70% of economic activity. A healthy report typically signals a stronger economy.
Compared with the same time last year, retail sales have risen 6.4%.
This week, the Federal Reserve issued a report saying the final six weeks of 2011 were among the economy’s best last year. The report pointed to higher holiday and auto sales, along with increased travel.
For the holiday season, many retailers drew customers by staying open on Thanksgiving Day or offering sharp discounts. Discounting helped generate record sales at the start of the shopping season and in the days before Christmas.
A survey of 25 merchants by the International Council of Shopping Centers found that revenue in December at stores open at least a year rose 3.5% over the same month a year ago. For November and December combined, the year-over-year gain was 3.3%.
That was a respectable increase. But it was less than the 3.8% year-over-year gain from 2009 to 2010.
The government’s monthly report is a broader gauge of retail sales. It covers purchases at all retailers, not just at major national chains. It also includes auto dealerships, restaurants and bars, grocery stores and gasoline stations.
The government’s retail sales report is seasonally adjusted. That way, the current month can be compared with the previous month. But the figures aren’t adjusted for inflation.
A separate government report each month measures consumer spending. It’s an even more inclusive gauge. It covers all spending at retailers — for both durable goods like cars that are expected to last for years and nondurable goods such as food.
This report also covers spending on services. Services include items such as doctor’s visits, airline tickets, apartment rentals and utility bills. The service category makes up two-thirds of consumer spending and isn’t covered in the retail surveys.