America’s retailers enjoyed a record 2011 and their first $400 billion sales months ever. But the final month of the year was a dud.
Sales eked out a 0.1 percent increase in December, lifting sales to a seasonally adjusted $400.6 billion.
It was the second straight month that sales have topped $400 billion. The government revised November sales to show a 0.4 percent gain, twice the original estimate.
For all of 2011, sales totaled a record $4.7 trillion. That was a gain of nearly 8 percent over 2010 _ the largest percentage increase since 1999.
Steady sales gains have fueled a 20 percent surge from the low during the Great Recession. Monthly sales are even 6 percent above their pre-recession high. The figures confirm evidence that the economy was strengthening as 2011 ended.
Still, December’s increase was the weakest in seven months. Excluding volatile auto purchases, overall sales actually fell 0.2 percent. It was the first such drop since May 2010.
Part of the reason was lower gasoline prices. Those prices reduced sales at gasoline stations by 1.6 percent. Excluding gas stations, overall retail sales would have risen 0.3 percent in December.
Another factor was heavy discounting during the holiday shopping season. Many retailers said they had to offer cut prices in December to attract shoppers.
Separately, more people applied for unemployment benefits last week, the government said. Applications rose 24,000 to a seasonally adjusted 399,000. But the gain was largely due to companies letting go of workers after the holiday season.
Economists downplayed the increase. It followed three months of declines that had reduced the number of unemployment applications to their lowest level in more than three years.
And businesses increased their stockpiles in November to meet rising consumer demand. That gain likely boosted economic growth in the final months of 2011. Companies are rebuilding stockpiles after cutting them last summer amid fears of another recession. It means many anticipate higher consumer spending.
The government’s report on retail sales showed that holiday discounts weakened department store sales. They fell 0.2 percent in December. A broader category that includes department stores like Macy’s and big chains such as Wal-Mart showed an even larger drop last month: 0.8 percent.
Compared with the same time last year, retail sales have risen 6.4 percent.
An earlier survey of 25 major retail chains by the International Council of Shopping Centers found that revenue in December at stores open at least a year rose 3.5 percent over the same month a year ago.
That survey’s figures aren’t adjusted for seasonal changes; the government’s sales figures are. The government report is also a broader gauge. 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.
Though December’s retail sales were disappointing, analysts said they still expect consumers to help the economy strengthen further, especially because businesses have stepped up hiring payday loan no faxing. More jobs mean more people with money to spend.
“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 percent jump in auto sales. Furniture store sales rose 1 percent. Hardware stores reported a 1.6 percent increase. But sales at electronics and appliance stores sank nearly 4 percent.
Restaurants and bars fared slightly better over the holidays. Their sales rose 0.7 percent.
The government’s retail sales report is its first look each month at consumer spending, which accounts for roughly 70 percent of economic activity. A healthy report typically signals a stronger economy.
Compared with the same time last year, retail sales have risen 6.4 percent.
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.
The job market has brightened, too. Employers added 200,000 jobs in December. And the unemployment rate fell to 8.5 percent, the lowest in nearly three years.
Many analysts predict that economic growth rose to an annual rate of roughly 3 percent in the final three months of 2011. That would be an improvement from the summer, when the annual rate was just 1.8 percent. And it’s much better than the 0.9 percent growth rate in the first six months of 2011.
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.
U.S. automakers have said that November and December were their two best sales months in 2011. Their U.S. sales rose 10 percent to 12.8 million in 2011, a 23 percent jump from the recession year of 2009.
Chrysler Group reported sales surged 26 percent for all of 2011. General Motors Co. saw sales rise 13 percent for the year. Ford Motor Co. reported an 11 percent gain for 2011.
Because the government’s retail sales report is seasonally adjusted, 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.
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