Economy Watch: Retail Sales Eke Out Increase; SoCal Home Sales Drop in December; Small Businesses More Optimistic
- Jan 15, 2014
The Census Bureau reported on Tuesday that U.S. retail and food services sales were $431.9 billion in December, an increase of 0.2 percent from the previous month, and 4.1 percent above the total in December 2012. The bureau adjusts its numbers for seasonal variations and holiday and trading-day differences, but not for price changes. Considering the low rate of inflation, however, that didn’t make that much difference to this report.
Despite the small monthly increase, almost every class of retailer saw a year-over-year increase compared with December 2012. One notable exception was department stores – which haven’t been able to catch many breaks since the recession, as their mid-market customers were squeezed – seeing an annual drop in sales of 4.7 percent. Gas station sales were down 0.8 percent since last year, but unlike most categories, that was because of a drop in the price of what the stores were selling.
Among bricks-and-mortars retailers, car dealers recorded the best annual sales increases in December, up 9.8 percent. Building supply sales were up 5.9 percent, furniture sales increased 4.6 percent, and clothing sales gained 3.9 percent. Non-store sales – the Internet, that is – topped them all, with a 10.3 percent year-over-year increase in December.
SoCal Home Sales Drop in December
Southern California home sales fell to a six-year low for the month of December as investor activity eased again and buyers struggled with a tight inventory of homes for sale, according to a report released on Tuesday by DataQuick. A total of 18,415 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month, which was 6.5 percent up from November, but down 9.2 percent from December 2012.
As one of the regional markets the worst hit by the recession, and an all-purpose bellwether market among housing markets even in normal times, SoCal is worth following. Foreclosure resales in the region – homes foreclosed on in the prior 12 months – accounted for 5.8 percent of the Southland resale market in December, down from 6.3 percent the month before and 14.2 percent from a year earlier. Last month’s foreclosure resale rate was the lowest since May 2007, when it was 5.4 percent. In the current cycle, foreclosure resales hit a high of 56.7 percent in February 2009.
Absentee buyers – mostly investors and some second-home purchasers – bought 26.2 percent of Southland homes sold last month. That’s the lowest share for any month since November 2011, when it was 25.1 percent. Last month’s absentee level was down from 26.6 percent the month before and 30.4 percent a year earlier. The absentee share has trended lower almost every month since hitting a record 32.4 percent in January 2013.
Small Businesses a Little More Optimistic
The National Federation of Independent Businesses said on Tuesday that its small-business optimism index ended December at 93.9, slightly up from November but below the previous three mid-2013 readings of over 94 and six points below the pre-recession average. On a more positive note, reports of capital spending rose from November, and job creation among NFIB firms was the best since February 2006.
Wall Street bounced back from Monday’s losses with healthy gains on Tuesday. The Dow Jones Industrial Average gained 115.92 points, or 0.71 percent. The S&P 500 advanced 1.08 percent and the Nasdaq was up 1.69 percent.