Posted by Marcelo Perez

A ray of light. Finally! According to the monthly Commerce Department report, retail sales, which account for about one-third of US gross domestic product, fell another 1.8% in November, after a downwardly-revised record 2.9% decline in October. In the last three months, retail sales are down 4.7% from the previous 3 months, a staggering number. In the last year, sales are down 7.4%. Wow.

Now what’s the good news, you ask? Well, simply put, the data is not adjusted for any price changes.  Consider gas prices, for instance, which have fallen by record levels in the past few months, The record 14.7% drop in sales at gas stations is mostly due to that adjustment in prices, not demand destruction. So in reality, you have a less excruciating number than what was reported. Retail sales, x-gas is only down 0.2% for the month. Much better than you would think, considering we are allegedly in the midst of another Great Depression. Now, exclude the very volatile auto-sales number and guess what you get? Retail sales gained 0.3% in November, the first increase since July, and right smack in the middle of the financial meltdown! I guess the world is not coming to an end. There is light at the end of the tunnel.

No, but honestly, this report is a huge positive, as it indicates a brighter future ahead, and maybe, just maybe, signals a bottom. So, I have a question? Are consumers really cutting back in epic proportions, as it’s being reported, or is this just be a case of falling prices with a large dose of fear and and a measure of uncertainty? You decide. 

Report Details (via MarketWatch):

Contrary to gloomy reports from the private sector, several retail groups recorded their biggest sales increases in years, after seasonal and other adjustments.

Auto sales fell 2.8% in November, confirming reports from the automakers that business had sunk to the lowest levels in decades.

General merchandise store sales rose 1.3%, including a 2.1% gain at department stores, the biggest gain in three years.

Sales at clothing stores increased 0.8%. Sales at stores selling leisure-time goods, including products from books to guns, increased 2.8%.

Sales at electronics and appliance stores rose 2.8%, the biggest gain in nearly three years.

Sales at furniture stores rose 0.2%, the biggest increase in six months. Sales at hardware stores fell 1.2%.

Sales at food stores rose 0.3%. Sales at health and personal care stores increased 1%, the best in two years. Sales at restaurants and bars increased 0.2%.

Sales at non-store retailers, such as online stores and catalogs, fell 1.3%.

Retail sales have fallen for the fifth straight month.

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