Consumer Spending - January 2011
Retail sales increased less than expected in December following strong gains in November and October.
- According to the U.S. Census Bureau, total retail sales increased 0.6 percent and core retail sales (excluding gas, autos, and building supplies) increased 0.2 percent in December. Retail sales rose 0.8 percent in November and 1.6 percent in October.
- Sales among retail categories were mixed over the month; nonstore retailers (online retailers), health and personal care stores, building supplies, gas stations, and autos contributed to the monthly gain.
Retail sales increased compared with a year earlier, pointing to an acceleration in consumer spending in the fourth quarter.
- According to the U.S. Census Bureau, the pace of growth for retail sales increased 7.9 percent in December on a year-over-year basis.
- Core retail sales (excluding gas, autos, and building supplies) remained at 5.6 percent for the second consecutive month.
Sales tax collections increased strongly on a year-over-year basis for the Sixth District.
- Sales tax revenues for the Southeast were up 4.9 percent in December compared with a year earlier. The rate of sales tax collections for the District as a whole has been increasing since July 2010.
Although sales tax collections continue to improve across the District, sales tax revenues are still relatively low for most District states.
- All Sixth District states had year-over-year increases in sales tax collections in December. Georgia had the largest increase (5.4 percent) while Louisiana had the second largest (5.3 percent).
- Sales tax collections increased 5.1 percent in Florida while Alabama and Tennessee both had increases of 4.5 percent compared with a year earlier. Mississippi posted a modest gain of 3.3 percent.
Consumer confidence in the United States and the South remained low in January.
- According to the University of Michigan's preliminary report, overall consumer confidence decreased in January and remains below prerecessionary levels.
- The University of Michigan's consumer sentiment index for the South Census region also fell in January but is above the overall U.S. consumer sentiment index.
Tourism activity in the District has shown improvement, and contacts in the industry are modestly optimistic about the outlook.
- Overall, tourism has increased slightly compared with a year earlier for both business and leisure in most markets in the District, and the outlook remains positive going into 2011.
- Hotel occupancy rates have risen in several of the District's major markets compared with a year earlier, according to Smith Travel Research.
- In addition, cruise lines reported an increase in both bookings and pricing power.
- The increase in tourism has also been a boost to retail sales in some areas in the District. While tourism contacts project increased activity in 2011, it is expected to be modest.
Gaming tax revenues in Mississippi increased slightly in December.
District-assembled vehicle sales in October increased 13 percent from a year earlier, slightly above the nation's pace.
- District-assembled vehicle sales in December increased 13 percent from last year, led by rising volumes from Hyundai-Kia, Mercedes, and Nissan.
- Hyundai-Kia sales jumped 22 percent on a year-over-year basis, and Nissan posted 18 percent growth.