Consumers more sanguine, but they’re still bargain hunting

After Donald Trump won the presidential election, the upbeat tone of consumer confidence surveys and the ebullience of stock market investors had economy watchers expecting a strong month of retail sales in November.

After Donald Trump won the presidential election, the upbeat tone of consumer confidence surveys and the ebullience of stock market investors had economy watchers expecting a strong month of retail sales in November.

They were disappointed as sales rose just 0.1 percent. Peering inside the numbers from the Commerce Department, MarketWatch found weaker sales at car dealers (down 0.5 percent) and traditional department stores (down 0.2 percent).

The performance of Internet retailers, an increasingly popular option for Americans, wasn’t much better. Sales were up just 0.1 percent for them.

There was improvement in groceries and gasoline sales, and restaurants, but those are not the businesses that drive the economy. They’re the places where people spend money on their way to spending other money, only shoppers didn’t do a lot of that last month.

Perhaps it was because they were seeking better bargains than the stores were offering.

“The fundamentals of the household sector are still in pretty good shape,” Scott Brown, chief economist for Raymond James Financial Inc. in St. Petersburg, Fla., told Bloomberg. “The anecdotal information suggests that consumers are out there spending, even though they’re very much looking for discounts. That’s been a long-term story.”

Meanwhile, consumer prices rose in November for the fourth month in a row, a sign of the inflation the Federal Reserve expects to begin to tamp down with the quarter-point rate increase it approved last Wednesday.

The Labor Department said the Consumer Price Index rose 0.2 percent as gasoline, rent and used cars grew more expensive, although clothing and groceries got a bit cheaper.

“As the transitory influences of earlier declines in energy prices and prices of imports continue to fade, and as the job market strengthens further, we expect overall inflation to rise to 2 percent over the next couple of years,” Fed chairman Janet Yellen said Wednesday.

Excluding the volatile food and energy categories did not change the pace. The increase stayed at 0.2 percent.

The first major November reports on the housing industry last week were disappointing. The Commerce Department said Friday that housing starts fell 18.7 percent in November, to a seasonally adjusted annual rate of 1.1 million. Permits fell 4.7 percent, to 1.2 million.

Housing starts were at a nine-year high a month earlier. Despite the larger than expected decline, the Wall Street Journal said the number stayed at a level that suggests there is steady demand for single-family homes.

“The current message is one of optimism that single-family starts are going to continue to gain ground in the months ahead,” Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, said in a research note before the housing report that was cited in a Bloomberg story. “Whether recent sharp rises in interest rates have a dampening effect remains to be seen.”

Bloomberg also said home building during the fourth quarter has been at a faster pace, on average, than in the third quarter and that permits for single-family properties have increased.

Builder sentiment has been challenged by a recent rise in mortgage rates, limited numbers of skilled workers and shortages of available lots, but it surged in December, Bloomberg also said. There is optimism that Trump will ease regulatory burdens.

This week, the last before the holidays, we will see November reports on home resales (Wednesday) and new-home sales (Friday)

Other important reports scheduled this week include data on personal income and consumer spending on Wednesday and the University of Michigan’s final Consumer Sentiment Index for December on Friday.

On Dec. 9 the university’s preliminary index for the month came in at 98.0, one-tenth of a point below its 2015 peak, largely on the public’s reaction to Trump’s victory.

The fresh reading this week is likely to continue the upward trend. The new president won’t take office until January, so there is room for consumer optimism to grow without much resistance until Trump is inaugurated and begins to set policy the public can identify and measure.

Gus Faucher, deputy chief economist at The PNC Financial Services Group, remains optimistic about holiday season retail sales despite the November weakness, saying "the fundamentals for consumers are good."

In a research note that U.S. News & World Report quoted, Faucher said, “On a year-ago basis, total retail sales were up 3.8 percent in November, indicating that this will be a good year for holiday sales."


Suntex Acquires Tampa Area Marina

The Marinas at Little Harbor, with slips and drystack storage, is in a resort community that’s being developed in Ruskin, Fla.

Littelfuse to Acquire Carling Technologies

The $315 million transaction is expected to close in the fourth fiscal quarter.

Boat Sales and Fraud

Boat History Report has tracked a 123 percent increase in fraud on the preowned-boat market since the pandemic buying spree began.

Avoid Cutoff Confusion

Dealers should familiarize themselves with a new law requiring engine cutoff switches so they can inform their customers. Meanwhile, a new program puts Ohio youth in kayaks to learn about the importance of the Great Lakes.

Wave Wifi MNC1250

Wave WiFi has solutions to keep boats online further from shore using the fastest possible internet connections. Wave WiFi’s new Dual Band Marine Network Controller with SIM-activated cellular system (MNC1250) distributes fast reliable internet onboard. It can be connected to any internet source including cellular data using the built-in universal SIM card slot and transmits both 2.4 and 5GHz AP signals for speed and reliability. Gigabit ports provide fast throughput and Wave’s proprietary GUI (Graphic User Interface) makes it easy to set up and operate. New Multi Active WAN feature allows you to assign devices to a designated internet source of your choosing. Cameras, door alarms, and other devices can run on cellular while onboard users are connected to other land based hot spots.

OneWater Acquires T-H Marine

OneWater Marine purchased the Huntsville, Ala.-based P&A provider for around $185 million.

Groupe Beneteau Acquires Starfisher

The Portugal-based yard builds powerboats from 25 to 35 feet and was doing subcontracting work for the group.

Winnebago Posts Record Q4, Fiscal Year

The Chris-Craft and Barletta parent reported full year revenue of $3.6 billion, a 54 percent increase from 2020.