These days, it seems like every time we get some good news, we get some bad news to go with it. But for December, the bad news seems to be piling up on itself. Last week I wrote about the month’s negative unemployment report: the U.S. lost more jobs following some ever-so-slight job growth in November. But today’s news casts even more doubt on impending recovery. Retail sales and inventories both appear to be headed in the wrong direction.
Bloomberg/BusinessWeek reports:
Sales at U.S. retailers unexpectedly fell in December following a bigger gain than previously estimated the prior month, highlighting the risk that the largest part of the economy will be slow to recover.
The 0.3 percent decrease came after a 1.8 percent jump the prior month, Commerce Department figures showed today in Washington. Other reports showed inventories rose more than forecast in November and jobless claims climbed last week.
So retail sales reinforce the news that November was great. But they also confirm that December was not-so-great. Without solid consumer spending, it will be difficult for companies to justify more hiring.
And inventories rose more than thought in November. So, despite the decent sales that month, we still saw more production than purchasing. And given that December’s sales were weak, I’d expect that inventories rose even further last month.
Of course, 2009 is over, and thank God. But if it left excess inventory in its wake for the first part of 2010 to deal with, then that decreases the likelihood that we’ll see significant job growth towards the beginning of the year. Given December’s unemployment report, that’s probably not surprising, but does confirm our fears.
