December US Retail Sales

As the holiday season ended and everyone got pampered by Santa, Investors are waiting for the December retail figures because it gives an indicator of the health of the economy in terms of consumption which accounts for around 70% of the US GDP. Retail sales compare the total retail sales of products and services during a given month of the same period of the previous year. Despite worries that customers are becoming more frugal with their purchases, this year's Black Friday and Cyber Monday sales in the U.S. were extravagant increasing by 11% and 9%, respectively, from 2021 to 2022, unlike UK consumers whom 48% of British consumers reflected their fears about their financial status in a survey by JP Morgan.


US retail sales are expected to surge 5% year-on-year for the month of December, lower than November’s sales. However, with the cost of housing, energy, and other things rising, retail Sales MoM is expected to slow down further by -0.40 % in December 2022 despite the holiday season. In November 2022, retail sales in the US rose 6.5% compared to the same month the previous year, the smallest hike since December 2021. However, retail sales declined by 0.6% MoM, more than the consensus forecast of 0.1%. The November MoM decline was the greatest decline this year.


With global economic uncertainty, inflationary pressures, and weak global economic growth, US Retail giants are expecting conservative season and earnings to be below expectations. Walmart Inc. (WMT) expects sales to grow by 3%, a figure lower than Wall Street’s expectations of 3.5%, and adjusted earnings per share to decline by 3-5%. (AMZN) lost around half of its market share throughout 2022, and it is expected that revenue has only risen 9% to $510.7B and a net loss of $895M. Net sales of Costco Wholesale Corp. (COST) are also expected to grow slightly both sequentially and annually by 1.7% and 8%, respectively. Matthew Boss, Head of Department Stores and Specialty Softlines at JP Morgan believes that wage growth offsets the gloomy mood that prevails the retail sales and that discounts and offers will help consumers stating “Overall, consumers are facing obvious inflationary pressures, but they’re gravitating toward off-price discounters and global brands with stronger total addressable markets.” He furtherly said, “Branded apparel and footwear, value and convenience really stole the show over the Black Friday weekend.”


Waiting for retail sales data as they are expected to be released today at 8:30 AM EST….



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