Retail sales increased 7.2% in December but dropped .7% from November. Total holiday sales (Nov/Dec) increased 6.8% and for 2022, sales rose 8.7% above 2021. Consumer sentiment improved from November but was down 3.9% vs. 2022. The Current Conditions Index was up 15.5% over the previous month, but recent changes in global factors may dampen progress in the early part of 2023, and retailers need to be mindful of consumers’ continuing concerns over inflation. Consumers showed a willingness to dip into savings/extend credit to cover the gap between gains in personal income and inflation, but with the holidays over, will they pull back a bit on discretionary spending? Personal disposable income rose 3.5% in November, still well below the November CORE CPI rate of 5.7%. Inventories continue to challenge retailers, with Nov 2022 totals 18.4% above the previous year; tepid consumer spending will create challenges for retailers as they move thru excess inventories entering 2023.
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