TEXT OF INTERVIEW
JEREMY HOBSON: Now let's get to the all-important retail sector. Some of the big chains like Macys, Target and American Eagle disappointed investors this morning with measly results for the holiday shopping season.
Diane Swonk is chief economist at Mesirow Financial and she's with us live now from Chicago. Good morning.
DIANE SWONK: Good morning.
HOBSON: So we've been hearing a fair amount of good news recently. Seems like the economy is finally starting to sustain some growth in various sectors. Why didn't people spend much money during the holiday season?
SWONK: There's really two factors. One -- less important -- is we had snow storms on the east coast, which kept New Yorkers out of the stores. More importantly -- energy prices, prices at the pump, crept up during the holiday season and that forced consumers to make trade offs. We saw that in November, but it was more dramatic in December, where they not only stopped buying, they were opting to buy things to fill their Christmas tree with and not going out in November. And in December they stopped buying as much to go under their tree as well.
HOBSON: And as we've been hearing on this show in the last nfew days, the energy prices aren't just going up because Americans are buying more gas>
SWONK: No actually it's because of the commodity-hungry developing economies, and also there's some supply shocks out there. The BP oil spill and problems and not investing enough when oil prices were lower have left supply a little shorter so the combination of the two has left us having to pay the price and shoulder the burden of higher energy prices. Something that we didn't necessarily create.
HOBSON: Put it all together for us -- put it in context. How much should we care about this sort of weak December retail picture?
SWONK: It's only one piece of news and overall the trend is in the right direction, but it really underscores how uneven and how rocky the recovery remains. We're going to see gaining momentum in the U.S. recovery, but remember, we've lowered the hurdles so low that it's not hard to clear these days.
HOBSON: Alright, Diane Swonk, chief economist at Mesirow Financial, thanks so much as always.
SWONK: Thank you.