Economy Watch: Consumers Feeling a Little Better
- Feb 18, 2013
The preliminary Reuters/University of Michigan consumer sentiment index for February, which was released on Friday, increased to 76.3 from the January level of 73.8. That meant better consumer pep than expected, but it’s still low by historical standards. During most of the 1980s, ’90s and 2000s until 2008, consumer sentiment was almost always above 80 and frequently over 100.
The index’s component assessing current conditions was up three points to 88, but that’s still below the low 90s readings of November. The expectations component was also up, by 2.1 points, to 68.7. It too is still considerably below near-80 readings of November and October.
Surprisingly, households with incomes below $75,000 were fairly optimistic in early February, “with expected gains in employment more than offsetting declines in after-tax incomes due to the end of the payroll tax cut,” Richard Curtin, director of the Thomson Reuters/University of Michigan Surveys of Consumers, noted in a press statement. Still, he continued, “even the current low rate of inflation is dramatically higher than the zero growth rate expected for household income.”
Upward trend continues for e-commerce sales
E-commerce sales rose 4.4 percent during the fourth quarter of 2012 compared with the previous quarter, and a considerable 15.6 percent compared with 4Q11, the Census Bureau reported on Friday. For the full year 2012, e-commerce sales totaled $225.5 billion, up 15.8 percent compared with the full year 2011, while total retail sales were up 5 percent in 2012 compared with ’11.
According to the bureau’s definition, e-commerce involves the sale of goods and services in which the order is placed online, or the price or terms are negotiated over the Internet. The latest quarterly increase is only one of a steady string of increases since the bureau began tracking Internet buying and selling in the last quarter of 1999. In fact, e-commerce has, on the whole, grown faster than standard retail sales over the last decade-plus.
In 4Q12, e-commerce as a percent of total sales was up two tenths in the quarter compared with the previous quarter, to a record 5.4 percent. Back in 4Q99, e-commerce represented just 0.6 percent of total retail sales.
Industrial production sees downtick
U.S. industrial production in January dropped 0.1 percent, following an advance of 0.4 percent in December and a 1.4 percent jump in November, according to the Federal Reserve on Friday. Take cars and trucks out of the equation and manufacturing output also declined 0.1 percent month-over-month in January, following a 0.9 percent increase in December and a 1.3 percent rise in November.
Wall Street ended the week inconclusively on Friday ahead of the Presidents’ Day holiday. The Dow Jones Industrial Average gained 8.37 points, or a scant 0.06 percent, while the S&P 500 and the Nasdaq lost 0.1 percent and 0.21 percent, respectively.