Yesterday, the Census Bureau released advance estimates for December's seasonally adjusted retail sales. The result was not what the market had hoped for.
Expectations had called for December's retail sales to come in 0.5% to 1% above November's level, but the Census numbers showed a 0.3% month-over-month decline.
Though there have been recent signs that manufacturing activity may be picking up, the market has placed considerable focus on a consumer recovery. That certainly makes sense, considering that consumers account for more than 70% of the U.S. economy.
But while this drop-off may be disappointing, it's worth noting that December's sales remained 5.4% above December 2008. So if we're not necessarily moving in a straight line, at least we're still going vaguely in the right direction.
Looking deeper into the Census Bureau's report, we could probably consider the auto industry a winner. Sure, its month-over-month decline of 0.9% was worse than overall retail sales, but the industry looks like it may actually be hanging on to some of the momentum from -- dare I say it -- Cash for Clunkers. Sales were up 7.6% versus December 2008, even though they're still down about 8% from August, which was the end of the Cash for Clunkers program.
Fans of Ford (NYSE: F ) and Toyota (NYSE: TM ) may not be too surprised by this, because they've already been touting their big sales jump in December. And while this increase is good for some of the automakers, dealers like used-car specialist CarMax (NYSE: KMX ) could be benefiting as well.
Another bright spot in the numbers was the sales from "nonstore retailers" -- which primarily consist of mail-order and Internet sales. Sales in this area were not only up 1.4% from November, but also posted a big 10.3% jump from 2008. What company's upcoming earnings might reflect this big jump? I'm going to go ahead and bet Amazon.com (Nasdaq: AMZN ) .
Restaurants ranked among the weaker areas in the report. Year-over-year restaurant and bar sales were up just 1%, and they slid 0.6% from November. This industry didn't get hit nearly the same way others did during the recession, so recovery may not have the same impact on it. However, overall sluggish growth could still mean headwinds for companies like Starbucks (Nasdaq: SBUX ) and Yum! Brands (NYSE: YUM ) .
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