Are US Consumers About to Stun Economists This Holiday Season?
A couple months ago, economists were having Tourette outbursts about “depressions” and “double-dips”. Although the US economy is still healing, apparently consumers are not paying much attention to economists.
Retail Sales (XRT, RTH) just rose for the fourth straight month following weakness in May and June.
The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for October, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $373.1 billion, an increase of 1.2 percent (±0.5%) from the previous month, and 7.3 percent (±0.7%) above October 2009. Total sales for the August through October 2010 period were up 6.3 percent (±0.5%) from the same period a year ago.
Economists expected half that gain.
Although most of the sales strength came from autos (ex-autos, retail sales rose 0.4%), that’s a healthy data point given autos are the second most expensive thing we consume after housing.
Frequent readers of Wall St. Cheat Sheet know we’re always skeptical of government data sets. But, when I combine today’s surprising Retail Sales number with the “shocking” improvement in private sector payrolls last month, I must start asking whether the economy is improving more than economists and the media care to accept. And if holiday sales are reasonable, I think many people will be caught off guard.