For the third consecutive week since the beginning of the year, the ICSC-Goldman Sachs index of retail sales is down. For the week ending January 19th, sales fell 1.5% from the previous week.
For the year to date, however, the ICSC-Goldman Sachs index indicates that store sales are up 3.2%, significantly higher than the Redbook reported index which indicates much slower growth of 1.8% year-to-date.
With just three weeks of data in hand it’s a bit risky to make sweeping generalizations about the direction of 2013 retail sales, but we could be seeing the first effects of the elimination of the 2% cut in payroll taxes on some 160 million Americans and the rise in the top tax rate on those who earn more than $450,000 a year.
Reuters cites one analyst who claims that the tax hikes could subtract a full percent from U.S. GDP growth in 2013 and another who believes the payroll tax hike alone will cut growth by 0.7% this year. Cutting federal spending, as many in Congress seem determined to push through, will not improve GDP growth; in fact, quite the reverse.