Bloomberg News

Retail Sales in U.S. Probably Increased on Holiday Discounts

January 12, 2012

Jan. 12 (Bloomberg) -- Sales at U.S. retailers probably rose in December as Americans bought discounted holiday items, giving the economy a boost entering 2012, economists said before a report today.

The projected 0.3 percent gain would follow a 0.2 percent advance in November, according to the median forecast of 75 economists surveyed by Bloomberg News. First-time jobless claims were little changed last week, another report may show.

Retailers like Macy’s Inc. spurred demand by cutting prices and extending hours to ensure consumers, strapped by falling home prices and stagnant wages, shopped for holiday gifts. A report last week showed unemployment fell to an almost three- year low and hiring accelerated, indicating an improving job market will give workers the means to sustain spending.

“Holiday shopping was fairly healthy, with retailers aggressively discounting items,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. “The American consumer can continue spending at a modest to moderate clip now that employment growth is picking up and household finances are in somewhat better shape.”

The Commerce Department will report the sales data at 8:30 a.m. in Washington. Economists’ estimates ranged from a decline of 0.2 percent to a gain of 0.9 percent.

Employers added 200,000 jobs in December, twice as many as the prior month, and the unemployment rate dropped to 8.5 percent, the lowest level in almost three years, Labor Department data showed Jan. 6. Hours worked and earnings also picked up.

Jobless Claims

Initial jobless claims rose to 375,000 last week from 372,000 the previous period, data from the Labor Department may show at 8:30 a.m. The latest four-week average of claims is the lowest in more than three years.

An improving labor market helped make for a brighter holiday shopping season. Same-store sales for the more than 20 companies tracked by Retail Metrics gained 3.6 percent in December, topping the 3.3 percent average of estimates gathered by the Swampscott, Massachusetts-based researcher. Macy’s, based in Cincinnati, reported a 6.2 percent increase, topping the 4.6 percent estimate.

Americans also turned to the Internet for gift buying. Online retail purchases rose to a record $37.2 billion in November and December, a 15 percent increase from 2010, Reston, Virginia-based, ComScore Inc. said in a statement Jan. 4. Inc., the world’s largest online retailer, on Dec. 15 said customers had bought about 1 million of its Kindle e-book readers and tablets in each of the previous three weeks. The Kindle Fire tablet, which sells for $199, had been the best- selling product on since its introduction 11 weeks earlier, the Seattle-based company said in a statement.

Favorable Weather

Favorable weather across the U.S. may have fueled December sales of building materials, restaurant meals and general merchandise, economists at Credit Suisse said in a research note to clients. The average temperature in the contiguous 48 states was 35 degrees Fahrenheit (1.7 degrees Celsius), the 34th warmest December in 117 years, according to the National Climatic Data Center’s website.

Signs the economy was gathering momentum at the end of 2011 has propelled share prices. The Standard & Poor’s 500 Index has climbed 12 percent since a recent low on Nov. 25.

Meantime, auto purchases have improved. Car and light truck sales in the U.S. advanced in December at a 13.5 million annual rate after November’s 13.6 million, the best two months since May-June 2008, according to researcher Autodata Corp. Sales averaged 16.4 million in the two years before the recession began in December 2007.

Ford Sales

Ford Motor Co., the second-largest U.S. carmaker, posted a 10 percent gain in sales last month from a year earlier, and closed out 2011 with 2.15 million light vehicles purchased, an 11 percent gain.

“We were able to end the year on, what we feel, is a high note,” Erich Merkle, Ford’s U.S. sales analyst, said on a conference call Jan. 4. “December was a strong number.”

Another report at 10 a.m. today from the Commerce Department may show business inventories rose for a second month. The projected 0.X percent gain in November would follow a 0.8 percent increase the previous month, according to the median estimate of economists surveyed by Bloomberg.

--With assistance from Chris Middleton in Washington. Editors: Vince Golle, Carlos Torres

To contact the reporter on this story: Bob Willis in Washington at

To contact the editor responsible for this story: Christopher Wellisz at

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