The American consumer is definitely back. Retail sales in December rose to $380.9 billion, setting a new all-time high, according to the Census Bureau. While it might be tempting to blame the rise on holiday sales, this number is seasonally adjusted, so we're seeing authentic demand -- not seasonal effects. This is pretty great news, as it indicates that Americans are beginning to feel more comfortable spending, which should help to stimulate the economy and spur more hiring.
Let's start with the historical chart:
December's sales tally slightly eclipsed the previous high set in November 2007 of $380.0 billion. This chart leaves no doubt that there has been a fairly steep upward trend in sales that began in mid-2010. Since June, monthly sales have increased by $19.7 billion, or 5.5%.
Since we now have the full year's worth of data for 2010, here's how it stacks up to other years in the past decade:
In 2010, total retail and food services sales reached $4.51 trillion. As you can see, 2010 was much stronger than 2009; sales rose by 6.6%. Last year was nearly as strong as 2008, but more clearly lower than 2007. This was mostly due to weaker sales earlier in 2010.
December's data also provides the ability to estimate holiday sales. Here's another chart that considers just November and December retail sales, excluding autos, for the past decade: