Data released on Friday surprised to the downside with a 1.9% slide in December Retail Sales. Analysts at Wells Fargo point out the decline was broad-based. They see cratering in retail sales more as a reflection of early shopping and pulled-forward demand than an Omicron impact or a seminal change in consumer activity.
“Retail sales dropped 1.9% in December, the largest monthly decline since February; stripping away spending on autos and gas only makes it worse with a 2.5% decline. Those looking for confirmation of an Omicron-related slowdown will seize upon today's drop in retail sales as evidence, but this is a decline we have been anticipating since our first holiday sales forecast in September. We warned then about a year-end air-pocket and compared the struggle for retailers to holding an early lead in a football game. It is clear that most shoppers heeded the advice to get holiday shopping done early and that, combined with a massive surge in goods spending earlier in the year, conspired to pull sales sharply lower to end the year.”
“Even with the plunge in sales in December, holiday sales still posted a record annual increase. Sales in November and December came in 12.9% ahead of last year's level and ahead of our forecast which called for an 11% gain in sales.”
“We still believe consumers continue to become desensitized to rising case counts with each passing wave of the virus. This is particularly true today with the growing evidence that this variant is causing less severe illness. Inflation thus appears to be the larger concern for consumers who are seeing income gains struggling to keep up with rising prices. Weak income growth in January due to dwindling stimulus may also weigh on consumer psyche during the month.”
“While December's sales print makes tough comparisons for the start of the year, we remain confident consumers will see above-trend growth this year.”
Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.
© 2011-2022 Teletrade-DJ International Consulting Ltd
Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.
The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).
The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.
TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.
Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.