If consumers are sanguine about the U.S. economy at large, is there a disconnect at the spending level?
The Wall Street Journal reported that the boost in confidence among consumers has extended into the early weeks of 2017, buoyed in part by the surprise election of Donald Trump to the presidency. As noted via data released by the University of Michigan this past Friday (Jan. 13), the initial reading on consumer sentiment for January (thus far) stood at 98.1, which is just below the 12-year high seen at 98.2. As WSJ reported, that is a big jump from the 87.2 reading seen as recently as Oct. 2016.
And yet, data also debuted on Friday that showed that, according to the Commerce Department, retail sales were up an anemic 0.6 percent in December, as measured from the previous month and, if gas and car sales were stripped out, were flat from last year.
Looking at the holiday shopping season, retailers in aggregate said that department store sales were down 8.4 percent, noteworthy against a backdrop of struggling retailers, such as Macy’s and Sears. Online retailers, by stark contrast, saw sales up 13.2 percent.
WSJ stated that “good vibes” post-election may not be enough to goose spending. Instead, a boost to spending may only materialize if and when wage and job growth continues.