Are Households Saving Their Pump Savings?
The fall in gasoline prices was supposed to provide some high-octane fuel to retail sales. But for two months in a row, nominal retail sales contracted, suggesting that households were not spending all of their savings at the gas pump of late on other items. But, of course, the (horseless?) carriage trade's spending might not be heavily affected by lower gasoline prices inasmuch this item represents relatively little of its total spending on goods. But how do you explain two consecutive months of minuscule Wal-Mart same-store sales? Year-over-year comps for Wal-Mart in October and November were 0.5% and minus 0.1%, respectively. The November performance for Wal-Mart was the weakest in 10 years. Wal-Mart's customer base encompasses those for whom gasoline is a relatively large component of their total purchases of goods. Could it be that the masses are saving their pump savings?