Posted 1:30 PM by Robert

Those Elusive Retail Sales

The official Commerce Department numbers on December retail sales are out today. The Wall Street Journal reports:

Retail sales climbed in December, but the gain came entirely in the auto sector as department stores suffered through a lackluster holiday shopping. ... Retail sales rose 1.2% after a revised 0.9% gain in November, the Commerce Department said Tuesday. But without auto sales, retail sales would have been unchanged for December. November retail sales were previously estimated as a 0.4% increase. ...

Despite the gain in December, consumers sharply slowed their spending during the fourth quarter of 2002, economists said. They believe the growth rate for spending will be only half the 4.2% pace recorded in the third quarter. The slow consumer spending, which accounts for two-thirds of economic activity, is expected to push growth in gross domestic product for the fourth quarter below an annual rate of 2%. The government will release its first look at fourth-quarter GDP later this month.

Sales at nonstore retailers, which includes mail-order and Internet sales, rose by 3% in December.

Sales at clothing and accessory stores rose 0.8%, while department-store purchases fell 0.3%.

Sales at gasoline stations rose 0.7% for the month, partly reflecting higher prices.

Retail sales were up by 4.6% on a year-over-year basis. On a seasonally unadjusted basis, 2002 retail sales rose 3.4% ....

Reuters also has a report.

One curious omission for each of these reports is their failure to mention the rapidly growing influence of gift cards on holiday sales. Gift cards are puchased and given as gifts, but are not recorded as sales by retailers until the card is actually used to obtain merchandise. That means many people may have received gift cards in December but not yet have converted them into gifts. That effect possibly explains at least part of reports that retailers have seen modest gains in sales so far this year, according to the latest weekly data.