Yahoo Finance Retail Sales Up in December: Will This Set the Trend for '17?
U.S. retail sales rose in December, as people went on to buy automobiles and a range of other goods, clearly indicating that the economy is quite steady at the moment and is ready for a big transition from Obama’s administration to Trump’s regime. An improving job scenario, rising wages and spiraling confidence led consumers to spend more and the result is visible.
The Commerce Department stated that U.S. retail and food services sales for the final month of 2016 increased 0.6% to $469.1 billion following a revised upward reading of 0.2% growth registered in November. This shows that consumer spending – accounting for over two-thirds of U.S. economic activity and one of the pivotal factors driving the economy – remains strong.
Retail sales increased 4.1% from Dec 2015. It rose 3.3% in 2016 compared with 2.3% growth witnessed in 2015. The report suggested that sales at auto dealers jumped 2.4%, while receipts at gasoline stations advanced 2% due to higher fuel prices. Excluding automobiles, gasoline, building materials and food services, retail sales were up 0.2% last month.
Retail-Wholesale is hogging all the limelight now. Although, the sector has not been an outstanding performer, it still holds promise, given the favorable economic indicators. Moreover, friendlier fiscal and regulatory policies from the incoming administration also bode well for the sector. We note that over the past year, the sector has registered an increase of 13.5% compared with the S&P 500 that surged 20.3%.
The recent rebound in oil prices, encouraging employment picture, along with a gradual improvement in the manufacturing sector and housing market signal that the economy is on a recovery mode. Amid such a scenario, the retail sector presents itself as a lucrative investment hub. Moreover, according to the latest Earnings Trends report, as of Jan 11, 2017, the sector is expected to record top and bottom-line growth of 5% and 10.9%, respectively.
However, we understand that the sector is not fully immune to global uncertainties, which could limit growth. But you can easily count on favorably ranked retail stocks backed by sound fundamentals. These include Best Buy Co., Inc. BBY, The Children's Place, Inc. PLCE, Burlington Stores, Inc. BURL, Dave & Buster's Entertainment, Inc. PLAY and Tilly's, Inc. TLYS, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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The Children's Place Retail Stores Inc. (PLCE): Free Stock Analysis Report
Best Buy Co. (BBY): Free Stock Analysis Report
Dave & Buster's Entertainment Inc. (PLAY): Free Stock Analysis Report
Tilly's Inc. (TLYS): Free Stock Analysis Report
Burlington Stores Inc. (BURL): Free Stock Analysis Report
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