The Census Bureau of the Department of Commerce announced today that its advance estimate of seasonally-adjusted retail sales for December showed an increase of 0.3% for the month. This was half the 0.6% increase that had generally been predicted by analysts, and reinforces the conclusion based on other data sources that the Christmas shopping season brought little for retailers to cheer about. When the highly-variable auto sales numbers were excluded, the sales gain was still lower at 0.2%. For all of 1995, retail sales rose 4.9%. This compares with a growth rate of 7.8% in 1994, and was the lowest annual growth rate since 1991 when the economy was coming out of a recession.

Elsewhere on the retail front, Johnson Redbook announced this afternoon that sales during January were up 0.5% from December. Last week's Redbook report, covering the first three weeks of January, showed a decline of 0.2%. So sales at the stores it surveys must have picked up briskly during the final week of the month. Earlier in the day, Mitsubishi Bank/Schroder Wertheim announced that chain store sales during the week ended January 27 were up 0.2%.

The Conference Board announced this morning that in January its consumer confidence index dropped a whopping 12.2 points, falling from 99.2 to 87.0. The January reading was the lowest since March of 1994. This dragged Merlin's Monthly Magical Mysterious Michigan/Conference Composite Consumer Confidence Index down to 88.5 from a three-month high of 95.1. [If you wonder what the heck I'm talking about here, check the Economic Indicators article for 11/10/95]

Bond and Stock Market participants took one look at today's news and appeared to decide that an interest rate cut by the FOMC was a sure thing. Both markets closed way up for the day.

Byline: Lafferty (MF Merlin)