U.S. retail sales rose .3% in November, aided by car sales which is normal for end of year model sales. This offset a 0.3 % decline in October. Department store sales dropped 0.8 percent and general merchandise that includes Wal-Mart and Target fell 0.9 %.
For December, adjusted sales were 0.5% higher which statistically would fall within a margin of error for 0 %.
Spending for 2012 didn’t even equal 2011; unadjusted 2012 at 5.2% which is down from 7.9% overall unadjusted in 2011.
Excluding auto sales which traditionally impact end of year sales, sales rose 0.3% which was slightly above the predicted 0.2% positive forecast (not minus .3%).
It is forecast that spending is unlikely to move upward by much until hiring picks up. Right now, consumer spending which is 70+ % of the economy and the main driver. Overall, the trend is flat and new taxes will put a further strain on consumer spending power. We had the Christmas season spike (such as it was), but it is a new year with new government drains on the economic engine. Overall, I would say the theory still fits but who knows? Miracles do happen.
We will see how consumer sales go for the rest of the year. It is worth noting that the trade deficit has dramatically shrunk due to record oil exports.
Record Oil Exports Shrink Trade Deficit as U.S. Fills Energy Gap
"The gap shrank 20.7 percent to $38.5 billion, lower than any estimate in a Bloomberg survey of 73 economists and the least since January 2010, Commerce Department figures showed today in Washington. The jump in fuel sales to overseas buyers, combined with purchases of the fewest barrels of imported crude in almost 16 years, led to the smallest petroleum deficit since August 2009."