The economy offered up mixed messages in December as 2017 closed out with strong retail sales despite a dip in overall consumer confidence. Retailers enjoyed a very happy holiday season with a 4.9 percent increase in sales over the previous year. The boost was the largest year-over-year increase since 2011.
It was a welcome shot in the arm, even as many high-profile retailers ended the year on a sour note. Macy’s saw comparable sales drop for the 12th straight quarter, and RadioShack closed 1,000 stores earlier this year. However, Target spent $7 billion to upgrade stores across the country, and it turned out to be a good decision. Comparable sales were up 3.4 percent in the last two months of the year. Target joined other giants J.C. Penney and Kohl’s who had positive holiday shopping seasons.
But overall consumer confidence dropped 6.5 points from November, according to The Conference Board Consumer Confidence Index® (CCI). November’s index of 128.6 was the highest in 17 years, but worries about the job market and the economy brought down the index last month. On the other hand, consumer confidence among Hispanics is up, according to The Hispanic Consumer Sentiment Index (HCSI). The index jumped 15 points from the third quarter of 2017 and now stands at 93.5. The positive outlook by Hispanics headed into 2018 is despite President Trump’s approval rating among the group reaching just 33 percent.
Also promising is the number of respondents to the CCI who plan on buying a home in the first half of 2018. In December 1.7% of those surveyed said they planned to buy a home within the next six months, up from November’s 1.1%. Overall, the percentage of respondents planning on buying a home has been on the rise for the past five years. Additionally, mortgage applications for new home sales were up 18 percent in December over the previous month.
The economy appears to be off to a strong start in 2018. Do you expect it to continue? Let us know in the comments.