Retail, Auto Sales Show Improvement as Home Prices Rise

Store sales saw higher growth for the last week of 2015, as post-holiday sales enticed more activity than a year ago.  Clearance sales drew “a strong response” according to Redbook Research, a retail research firm.

Store sales saw higher growth for the last week of 2015, as post-holiday sales enticed more activity than a year ago.  Clearance sales drew “a strong response” according to Redbook Research, a retail research firm.

According to a new report, Redbook believes retail spending rose 2.9 percent on a year-over-year basis for the week ending January 2, which the firm attributes to high demand for discounted goods in large chain stores and department stores. According to the study, traffic for the week was “relatively high,” indicating more economic activity and greater consumer confidence in the economy.

Car Sales Rise Higher

At the same time, total vehicle sales in the United States shows further improvement, and several car manufacturers boast high sales gains as they eye a record year for car sales amidst cheap oil prices.

General Motors said Tuesday that industry sales would top the 2000 record for 2015, while noting that its own sales ended at 17.8 million on a seasonally adjusted annualized basis for the month of December. “The U.S. economy continues to expand and the most important factors that drive demand for new vehicles are in place, so we expect to see a second consecutive year of record industry sales in 2016,” said GM Chief Economist Mustafa Mohatarem.

GM sales rose 5.7 percent on a year-over-year basis; while Ford saw an 8 percent increase. Toyota’s U.S. sales rose 11 percent, while Fiat Chrysler gained by 13 percent and Nissan rose 19 percent. Nissan noted that its Infiniti brand proved particularly strong.

Bucking the trend was controversy-plagued Volkswagen, which saw sales fall 9.1 percent due in part to an emission scandal that has prompted the Justice Department to launch a criminal probe against the company.

Analysts believe 2016 sales will reach 18 million vehicles, despite rising interest rates for auto loans.

Home Prices Rise

While car dealers are finding it easier to offload inventory, housing is also showing strength as home prices rose both year-over-year and month-over-month in November, with expectations for further gains in 2016 to come.

According to a new study by CoreLogic, home prices rose 6.3 percent on a year-over-year basis in November, thanks to tightening supply and demand unabated by rising interest rates that are making mortgages pricier. “Many factors, including strong demand and tight supply in many markets, are contributing to the long-sustained boom in prices and home equity which is a very good thing for those owning homes,” said CoreLogic CEO Anand Nallathambi.

CoreLogic Chief Economist Frank Nothaft noted price gains have proved steady and sustainable, with the current trend already over a year old. “Heading into 2016, home price growth remains in its sweet spot as prices have increased between 5 and 6 percent on a year-over-year basis for 16 consecutive months,” he said in a statement.