Surge in Consumer Confidence Turns to “Dismal” Retail Sales beyond Autos, Gasoline

Surge in Consumer Confidence Turns to “Dismal” Retail Sales beyond Autos, Gasoline

Pundits sent back to the drawing board.

Consumer sentiment surveys have captured the “Trump Effect” elegantly. All major sentiment surveys agree: Consumer confidence has surged since the election. The University of Michigan consumer sentiment survey, released today, at 98.1 – while down a tiny 0.1 from the miraculous post-election jump a month ago – was still the second highest in 12 years, last month having been the highest.

But there’s now an intense partisan line dividing how consumers feel about the economy.

“The post-election surge in optimism was accompanied by an unprecedented degree of both positive and negative concerns about the incoming administration spontaneously mentioned when asked about economic news,” explained the survey’s chief economist, Richard Curtin.

This partisan divide between those who favorably mentioned the policies of the next government, and those who unfavorably mentioned them reached an extraordinary gap of 42.7 points in the expectation index.

And there’s one more thing: these jumps in consumer sentiment translated into a disconcerting lack of spending over the holiday shopping season.

Sales at retailers in the US edged up a disappointing 0.6% in December, from November, on a seasonally adjusted basis, according the Commerce Department today. Excluding sales at auto and parts retailers, which account for 21% of total retail sales, and excluding sales at gas stations, which benefited from sharply higher gasoline prices, retail sales were flat.

This got pundits worried about weaker economic growth in the fourth quarter.

Note that auto and parts sales, as reported by the Commerce Department here, are survey-based estimates denominated in dollars. The monthly new vehicle sales reported early in the month by automakers are based on the new vehicles actually sold by dealers to their customers, measured in vehicles (regardless of price), not dollars.

Sales at “General merchandise” stores declined 0.5%. In this group, sales at department stores declined -0.6%. Sales at “miscellaneous retailers” fell 1%.

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Wolf Richter

In his cynical, tongue-in-cheek manner, he muses on WOLF STREET about economic, business, and financial issues, Wall Street shenanigans, complex entanglements, and other things, debacles, and opportunities that catch his eye in the US, Europe, Japan, and occasionally China. WOLF STREET is the successor to his first platform… TP-Title-7-small-200px …whose ghastly name he finally abandoned in July 2014. Here’s the story on that. Wolf lives in San Francisco. He has over twenty years of C-level operations experience, including turnarounds and a VC-funded startup. He earned his BA and MBA in Texas and his MA in Oklahoma, worked in both states for years, including a decade as General Manager and COO of a large Ford dealership and its subsidiaries. But one day, he quit and went to France for seven weeks to open himself up to new possibilities, which degenerated into a life-altering three-year journey across 100 countries on all continents, much of it overland. And it almost swallowed him up.