Are there signs of life in the economy? Absolutely! But was this the "monster surprise" to the upside bounce in retail consumption we've been waiting for? Hardly.
First the details per Reuters:
U.S. retail sales were stronger than expected in November as consumers shopped despite high unemployment and producer prices rose, evidence the economic recovery gathered steam in the fourth quarter.The issue (as I've mentioned before and just last week in the inventory numbers) is this is NOMINAL, not real. Lets take a look at the jump in sales by category to see why this is relevant.
The Commerce Department said on Tuesday total retail sales increased 0.8 percent, advancing for a fifth straight month, as consumers snapped up clothing and other items at the start of the holiday season and receipts at gasoline stations surged.
In addition, sales for October were revised up to 1.7 percent from a 1.2 percent gain. The sturdy rise in sales was a boost for consumer spending, which accounts for more than
two-thirds of U.S. economic activity.
In dollar terms, 46% (yes almost 50% of the jump in nominal dollar terms) of the increase was on gasoline, 16% on clothing, and 13% on food. What we know for certain is that gas and food jumped in price in October and November (clothes jumped 1.2% in October... not sure about November, but we'll know more with the CPI release later this week).
So are things improving? Absolutely, but this is not the "blow out" number it first seemed.