December retail sales up six-tenths of a percent

A customer at a Lowe's home improvement store looks at a display of holiday decorations on November 4, 2010 in San Francisco, California. With three weeks to go until Thanksgiving, retail stores are beginning to sell holiday merchandise.

TEXT OF INTERVIEW

STEVE CHIOTAKIS: The nation's retailers saw just a little momentum at the cash register in December, including much of the all-important holiday shopping period. The Commerce Department reports retail sales were up six-tenths of a percent for the month.

Jill Schlesinger is editor at large for CBS/MoneyWatch. She's with us live from New York with some analysis.Hi Jill.

JILL SCHLESINGER: Good morning.

CHIOTAKIS: So, alright. Let's talk about these retail numbers. What's your take, first of all?

SCHLESINGER: I think a little bit light, below expectations. And my thinking on this is that consumers are still feeling quite a bit of pressure. They still have lots of debt. They're worried about the weak jobs market, and I think there's an increasing concern that housing could continue to be a problem this year.

CHIOTAKIS: Now people, Jill, are going to start getting some tax refunds, right? Are they going to spend that money at the stores, are they going to pay down this debt? What are they going to do with it?

SCHLESINGER: I think they're going to keep paying down debt and beefing up savings until they feel that the job market has turned, I think that is truly the key in this particular piece of data.

CHIOTAKIS: We also got word on consumer prices this morning -- up a half a percent in December. But if you take out food and energy, that number is lower. Food and energy are big things to all of us Jill. How does this affect the overall economy?

SCHLESINGER: You know, I always laugh when they say we've stripped out the food and energy. Most people must be thinking, oh you mean the things that I actually care about and affect me every single day? So listen, when you have to pay more for your food and to fill up your car at the gas station, you're going to have less money to spend. And I think that also ties into the retail sales. As people feel price pressure, they really take that money and pay for only the things that matter the most to them. They're not going to go out there and spend money on stuff that's a little bit over the top, concentrating on what's important. Keep an eye on this inflation number. I think this is going to be really a big key in consumer spending.

CHIOTAKIS: Jill Schlesinger in New York, thanks.

SCHLESINGER: Great to be with you.

About the author

Steve Chiotakis was the host of Marketplace Morning Report until January 2012.

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