Retail Sales Solid...For Now

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Retail sales for the month of December rose +0.5% from the previous month. Excluding autos, sales were up +0.3% month-over-month and +4.1% from December 2011. This was generally in-line with expectations.

It's important to note that monthly retail sales figures are adjusted for seasonal variation and holiday and trading-day differences, but not for price changes.

The chart below from Calculated Risk Blog shows the year-over-year change in retail sales, excluding gasoline, for the last 20 years.

December's report was solid, but I'm more interested to see how January retail sales will stack up. With the expiration of the 2% payroll tax holiday, consumers are seeing smaller paychecks this year. And that will likely provide a headwind for the consumer discretionary sector, in my opinion. We will have to wait and see.

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