Comments on 4Q 2012 Trends for the Retail Sector — Economic Overview
by Brice on January 16, 2013
Economic Overview by Senior Economist Ryan Severino
The US economy closed out 2012 in a somewhat disappointing manner. Third quarter GDP growth was revised upward to a 3.1% growth rate, above the economy’s long ‐run potential. However, inventory accumulation constituted roughly one ‐third of this growth – this is not tenable and is portentous for growth in the fourth quarter.
Moreover, the dilettantish manner in which Congress only partially averted the “fiscal cliff” likely restrained economic activity during the last couple of months.
Finally, Hurricane Sandy, which impacted a large portion of the US population, also has the potential to distort economic activity during the quarter. As a consequence, economic growth for 2012 is estimated to be roughly 2%, a clear disappointment and roughly on par with 2011’s performance. With the economy and labor market continuing to struggle, retail sales have been languid.
Even the mighty holiday shopping season was a disappointment as many shoppers remained cautious due to the inauspicious fiscal cliff. MasterCard’s Spending Pulse unit estimates that retail sales grew only 0.7% versus last year, ShopperTrak estimates that total US mall traffic declined ‐3.8% versus last year, while comScore estimates that holiday retail e‐commerce was up 16% versus last year. All of those data points are rather deleterious to demand for bricks and mortar retail space.
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