Economic prognosticators spent the end of 2012 fretting about looming spending cuts and toxic tax increases. Consumers, however, spent it shopping.
Retail sales across the nation rose 0.5% to $415.7 billion in December as Americans put fiscal cliff worries on the back burner and went on holiday buying sprees, according to the Commerce Department.
The increase was the second since November’s 0.4% bump.
“The fiscal cliff debate weakened confidence more than it weakened actual spending as December sales finished the year in decent fashion,” Credit Suisse analysts wrote in a report Tuesday.
Discretionary demand for autos, apparel, furniture and restaurants is “solid,” the analysts said. Consumer spending drives the majority of the economy.
From November to December, motor vehicle dealers enjoyed a 1.8% bump, while clothes sellers saw sales jump 1%. Sales at restaurants and bars swelled 1.2%.
Electronics retailers, such as beleaguered Best Buy, dipped 0.6%.
Over all of 2012, retail sales have boomed 5.2%, according to the Commerce Department – though the growth is smaller than the previous year’s 7.9% surge.
But stocks were down in morning trading Tuesday, with the S&P;, Dow and Nasdaq all dipping less than 1%.
Also on Tuesday, the Labor Department released data showing wholesale prices taking their third monthly dive in December. The so-called producer price index slipped 0.2% last month after a 0.8% slide in November.
The slide was largely due to a 0.9% decline in prices for finished consumer foods – the first since May and driven heavily by a 4.8% drop in beef and veal prices. Lower prices for vegetables and cheese also contributed.
[Updated, 10:45 a.m. PST Jan. 15: Also Tuesday, the National Retail Federation said that retail sales for November and December, including autos, gas stations and restaurants, totaled $579.8 billion – a 3% increase over the same period last year.
However, the same gauge increased 5.6% in 2011 and 5.5% in 2010. And for 2012, the trade group had predicted a 4.1% leap.
“Heading into 2013, consumers could continue to think twice about their discretionary purchases as they face decreases in their paychecks and other concerns with their household budgets,” said NRF Chief Economist Jack Kleinhenz in a statement.]