Kathy Willens / AP

If I hear or read another headline that calls November's retail sales results "surprising," I may scream. I am also hereby banning use of the word 'cautious.' On Thursday, the Commerce Department reconfirmed what retailers told us all last week. November sales were sweeter than expected. The consumer is still buying cold weather apparel and Christmas presents.

The fact that there are more shopping days in November and the calendar shift DEFINITELY benefited November's results to the detriment of December. The promotional levels (markdowns) that stores are taking right now also boosted sales results.

I was at Macy's just Thursday (on a recommendation from a friend) and bought 3 of my Christmas gifts in part due to the fact that the pricing was just so good. The promotional levels are clearly driving sales volume because customer service certainly is not.

Thursday's Commerce Department report reaffirms what retailers already know: consumers are absorbing higher gas, the housing crunch and market volatility enough to still shop this holiday. That's not a guarantee that the holiday results will be stronger than last year (just probably not drastically weaker) nor is a guarantee that spending will hold up through January.

Here's the data: overall sales + 1.2 percent but strip out a jump in gas prices and a decline in autos sales + 1.1 percent. The gains were broadbased (good news.) Clothing sales were helped by cold weather (+2.6%) but electronics and sporting goods also sold.

One interpretation is that this is a good indication of discretionary spending holding up during the holiday. The conservative view is that November sales benefited from a calendar & weather shift as well as heavy promotions. so spending strength may be more modest than the headline indicates. Stores themselves expect December to be softer.

Drew Matus of Lehman Brothers told CNBC Thursday (see video) that the retail sales report was good news and that people worried about recession in next few quarters have to take "those odds down a bit."

Bottom line: NOVEMBER'S A POSITIVE SNAPSHOT BUT WON'T SEE FULL CONSUMER PICTURE UNTIL JANUARY.

Check out "The Call" at 11am ET today. I'll be anchoring the show along with Dylan Ratigan.

I'm asking the question: If retail sales are showing up better than expected, why are retail stocks pricing in a recession? We'll talk opportunities, bargains and the outlook for the sector at 11am ET. See ya then.

Questions? Comments?

Tools:

PrintEmail Del.icio.us Digg It

Next Post

Previous PostBack to Main Page