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By the Numbers

Featuring brief segments of economic analysis from our senior economist Michael Bazdarich, PhD.

The economic analysis we previously featured in By the Numbers is now available on the Western Asset Blog. This page will no longer be updated.


November Retail Sales Post Another Nice Gain

Census Bureau data released today showed another good gain in retail sales in November, along with upward revisions to September and October data that had already looked good. Total sales were up by 0.7% (non-annualized) in November, and there was a 0.6% gain in so-called "control" sales, which focus on those retailers that are more dependent on consumer demand (as opposed to other store types, where many customers are businesses).

Control sales are displayed in the accompanying chart. As seen there, underlying sales growth had been steady from late-2011 through spring 2014 at an annual rate of 3.2%, but growth has picked up over the last six months, with a 6% annualized rate holding over that period. Gains occurred in all the store sectors one would associate with early Christmas shopping, namely department stores, apparel stores, books and sporting goods, and electronic appliances. Then again, most other store types showed nice gains as well. While early reports had it that Black Friday generated soft sales, the quick retort was that this was because early Christmas shopping had gotten front-loaded into pre-Thanksgiving shopping days. Today's news is consistent with those claims.

There really wasn't a blemish within today's report. The only proviso worth adding is that retail sales surged similarly exactly a year ago, only for those gains to be revised away later. We will see whether similar revisions occur this time. For now, today's news marks the fourth-straight economic release that has come in above expectations.

Ironically, the favorable news earlier this month on construction spending, exports and payroll jobs had failed to drive any widespread market impact, with bond yields substantially lower yesterday than before all that news, and stock prices softer as well. Only at the short-end of the curve has there been any net rise in yields. We'll see whether today’s fourth-straight stronger report makes a dent in financial market pricing.

Retail Sales Trends
October Home Sales Chart
Source: Census Bureau. As of 30 Nov 14. *"Control" retail sales is total sales less vehicle dealers, service stations and building material stores.

Michael Bazdarich

Product Specialist/Economist

Mike brings more than 45 years of experience to his position. "By the Numbers" will address economic data releases that are pertinent to a broad range of investors.

Prior to joining the Firm in 2005, Mike ran his own consulting firm, MB Economics. He earned his PhD in Economics at the University of Chicago.

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