With the end of the year approaching, the U.S. economy looks to be in good shape based on retail sales reports. In November retail sales increased by 0.7 percent and as the holiday season gets closer, experts think that this will continue to hold strong.
There were a lot of conflicting estimates about retail sales going into the holidays this year. With the global economy being affected by drastic changes in oil and gas, some predicted only a 0.4 percent rise for the holidays. This would be quite low compared to average months but it was thought to be well within the realm of possibilities. However with such a strong showing in November, it appears that these estimates have been wrong.
Keep in mind that this doesn’t mean that a poor December is impossible as well. Any sort of fluctuation in large markets could influence December sales, but it looks unlikely. Even though we are only slightly over a week into December there are certain surveys and estimates that have already been beaten.
A theory on this upswing is that falling oil prices are leaving more money in consumers pockets due to cheaper energy. The issue with this theory is that usually it takes more time to see oil prices reflected in the retail market. The good thing about that is, it most likely means December will finish strong.
Another thing to note is that the economy has indicated a trend in recovery many times in the past, only to dip back down. The strong November and early December that we are currently seeing is no larger than upticks we have seen in the past. At the end of December we will have a better indication on if this is just a random improvement, or a positive trend that might carry over into the new year.