Holiday shopping season offers mixed bag

The data for November's retail sales show Black Friday may have been as dark as the name implies. Violent incidents plagued the shopping holiday and the U.S. Department of Commerce shows sales increased less than expected.

Retail sales in November rose 0.2% over the previous month, a continued deceleration that began with a 1.2% increase in September followed by a 0.3% increase in October. But Mark Vitner, managing director and senior economist at Wells Fargo, tells Coffee Talk that the numbers are deceiving, and the holiday season has been quite positive. “Consumer spending has been fairly strong the second half of this year,” he says. “Looking at month to month data doesn't match with the rhetoric we're hearing because sales have been so strong.”

Indeed, core retail sales, which exclude automobiles purchases, gas and building materials, have been on a rising trend since January 2009. Vitner attributes the strong showing in November to consumer preferences leaning toward more expensive products, like the iPhone and the iPad. “Even (Apple's) competitors' products aren't cheap,” he remarks.

But Vitner and fellow Wells Fargo economist Tim Quinlan still cite worries about economic recovery in 2012. Because personal income isn't keeping pace with consumer spending, the latter is expected to fall off next year. “This is the last run here,” Quinlan laments. “We're forecasting for (the economy) to go into hiding in the first quarter of 2012.”