Allow me to channel my inner Jerry Seinfeld for a moment. Did you ever notice that economists spend most of December explaining what should happen over the next few months, but they spend most of January explaining what they think happened during the previous quarter?
Throughout the year I lean heavily on the monthly retail sales data reported by the Census Bureau, and the report for December is now available. There is also a steady stream of corporate earnings reports coming out for the fourth quarter. And the GDP report for the fourth quarter will be released at the end of this month by the Bureau of Economic Analysis.
So this is the month to glean and to process the important lessons from 2023. This entails holding myself accountable for the things I got wrong at this time last year, while at the same time searching for clues about what may happen next.
Total retail sales were strong in December 2023 as holiday spending came in higher than most analysts expected. When compared with the figures from December 2022, the strongest gains posted last month were at motor vehicle dealers, electronics and appliance stores, health and personal care stores, online retailers and restaurants. These five categories enjoyed year-over-year gains in the range of 10 percent. That's a nice way to finish out the year.
But the retail sector is about more than just the holidays. The trends in this data over the full year provide a good perspective on the choices American households are making about how they want to spend their money year-round. Many of the kinds of businesses upon which the Census Bureau reports each month are large end markets for many types of plastics products. Therefore, a longer-term view of this historical data is extremely useful for determining what will happen to demand for plastics in the coming months.
On the graph, I have the annual growth rates from 2023 for the major business categories from the report. There are a couple of things to keep in mind when studying this chart. First, the Census Bureau does not adjust this data for inflation. Adjusting this data would result in lower annual percentage gains for most categories than what is shown on the chart.