Total exports rose by 8.7% to record levels. Exports of industrial supplies, machinery, cars, foods and beverages were offset by declines in consumer product exports vs. last month.

Apparel imports declined slightly in December to $6.03 billion.  Though a much smaller number, apparel exports rose an outstanding 15.6%, to $427 million. Apparel exports to Canada and Mexico comprised over half the total, followed at a distance by those to Japan and the United Kingdom. Exports to Honduras, the DR, Costa Rica and Spain declined considerably, while those to Chile, the Netherlands, Taiwan and China increased significantly.

Textile imports increased by 6% in dollars compared to the same month last year, while exports gained only 1% to $900 million. Textile exports remain at near record high levels, thanks to healthy shipments to Canada and Mexico (which together comprise about half the total), and CAFTA countries El Salvador, the DR, Honduras and China.

China lost the most share of U.S. year-to-date dollar apparel imports in 2011, off 1.3 percentage points compared to a year ago. Mexico, El Salvador and India each lost .1 percentage points.

The dollar value per unit (SME) of imported apparel increased almost 13% overall during the year, with product from Pakistan increasing the most, at almost 25%.  The unit value of apparel from Cambodia increased the least, at up 6.5%.

Prices for apparel ticked up a whopping 4.7% in January, outpacing overall inflation for the sixth month in a row. Over the last few months, apparel has sustained the biggest monthly price increases in the past decade as soaring Asian labor costs and record high cotton converged with a double whammy on Fall and Winter goods. Although cotton prices have come back down to earth, labor costs remain an issue. Many companies are shifting their production to cheaper countries and Asia or bringing it back home to the Americas.

Women’s apparel prices increased 4.9% in the month, the smallest increase. Menswear rose 5.1%, while the infant’s and children’s apparel price index soared 7.5%.

Total retail sales increased 5.4% on a 12-month smoothed basis, lower than December’s revised 5.6% rise.  Removing autos from the mix, sales rose 4.2%. Department, discount and chain stores saw sales poke into positive territory for the first time in 7 months. However, specialty apparel stores enjoyed their smallest sales gain in 16 months. Sales might have been better had unseasonably warm weather in much of the country not depressed sales of outerwear and cold weather accessories across virtually all apparel channels.   

Total retail inventory grew by 3.1% in December, lower than November’s rise. The inventory to sales ratio has been dropping steadily for the retail industry over the past three years as retail companies invest in systems to better predict, manage and distribute inventory.

Sales in department, chain, and discount stores inched up .5 %, as big stores lured customers with great promotions. Nordstrom, Ross, Macy’s and TJX did particularly well. JCPenney stopped reporting monthly sales, but wowed the industry at an event in New York during which new CEO Ron Johnson announced major changes in the department store beginning February 1. Penney’s began running huge clearance sales to make way for an all-new merchandising and pricing plan. (click here for January’s store performance report.) Inventory at big stores dropped .9%, the seventh consecutive monthly decline. The inventory to sales ratio for big stores rose in December, but will no doubt drop in January.  

Apparel specialty store sales growth of 3.4% lagged the performance of the last several months. Specialty store inventory levels spiked again in December, by 7.7%, so we may very well see a very promotional environment continuing in this sector.     

The combined department, chain, discount and apparel specialty retailer sector, which we call apparel-oriented stores, enjoyed a sales improvement of 2.1%, above last month’s increase. 

Inventory to sales ratios rose slightly in December for the total retail industry, auto, general merchandise and department stores, but fell slightly for specialty stores.  

Consumers have apparently had enough of “deleveraging” — the paying down of debt that was taking place during the Great Recession. The question is, will they “re-leverage,” and start racking up charges the way they did before the economic downturn? We feel this is unlikely.

Consumers were burned during the recession, and have learned their lesson, at least until unemployment enjoys a much bigger drop and the housing market bottoms out. Revolving debt remains well off its high of $972 billion reached in late 2008, and will no doubt decline once holiday bills are paid.

Total indebtedness grew slightly in November, however. Overall consumer debt, which includes student loans, auto loans and mortgages, increased 3.7% compared to a year-ago, bigger than November’s increase, and now totals $2.5 trillion.

Since an employment trough in December 2009, retail has added 390,000 jobs.

On a 12-month smoothed basis, retail employment rose 1.2%, compared to 1.5% for the overall economy. The department store sector growth rate was 5.8%, compared to 1.7% for specialty stores. For the last two months, retail job growth has underperformed the rest of the economy. However, it appears as though the big stores are finally starting to realize that they need to start providing better service, and to do that, they need people.

(Note: Monthly employment figures going back to 2000 have been revised by the U.S. Bureau of Labor Statistics.)

Total nonfarm employment rose by 243,000, topping December’s increase of  200,000. Private sector jobs rose by 253,000. The biggest surge in new jobs was in professional and business services, which added 70,000 to their rolls, 33,000 of which were in employment services. 

Retail employment continued to trend up in January, adding 11,000 jobs. Since its trough in December 2009, retail trade has added 390,000 jobs. Manufacturing added 50,000 jobs, more than double December’s hiring level.

A total of 12.8 million Americans remain unemployed, down 300,000 during the month.  The unemployment rates for adult men (7.7%) and blacks (13.6%) declined, while those of adult women (7.7%), teenagers (23.2%), whites (7.4%), Asians (6.7%) and Hispanics (10.5%) were pretty much unchanged. 

Despite unseasonably warm weather in much of the country that had a detrimental effect on sales of sweaters, outerwear and other cold weather apparel and accessories, total sales at the top 16 apparel-oriented stores that reported January results today rose a collective 4.3%, better than December’s 3.8% rise. Same-store sales increased 3.7%, flat with last month’s rate.

Total sales increased to $12 billion from $11.5 billion last January. On year-to-date basis, sales rose 5% to $188 billion. However, it is important to keep in mind that most stores no longer report monthly sales, so the real proof will come later this month, when fourth quarter sales for the top 30 retailers, which include Sears, Walmart, JC Penney and many top apparel specialty chains, are reported. Also, even though these figures are better than December’s, most of the sales were at deeply discounted prices, almost certainly at the expense of gross margin.

Teen skate retailer Zumiez led the pack for the second month in a row with a better-than-expected 19% increase in total sales and the highest same-store sales rise in the group, 10.8%. Though still small, this company is executing extremely well in its core business and expanding into fashion and other areas as well, no doubt taking share from beleaguered PacSun and smaller independents.

For the fifth straight month, Nordstrom was among the top retailers in total sales growth, gaining 13.2% to $688 million. Unlike in recent months, when growth has been from the Nordstrom Rack division, January total and same-store sales results were due to gains at the flagship stores. Same-store sales at the upscale department store retailer increased  a less-than-expected 5%.

Kearney, NE-based Buckle, the only teen retailer reporting monthly sales, enjoyed the third highest total sales growth rate, at 10.8%, and an 7.4% same-store sales increase. They had hoped for a slightly higher increase, however.

Off-pricers Ross Stores and TJX were also big winners in January, with better-than-expected comps, evidence that consumers are still looking for quality and bargains. Ross saw total sales climb 9.5% to $483 million for the month. Comps gained 9.4%. Total sales at TJX, its much larger competitor (three times the sales of Ross) grew 7.7% to $1.4 billion, with comps up 7%. These stores kept merchandise fresh and frequently replenished throughout the holiday season, which results in frequent customer visits and a positive shopping experience. It will be interesting to see how much longer these retailers can resist launching e-commerce businesses.

Macy’s lagged expectations with total sales up 2% and comps rising 2.4%, though on a same-store sales basis it beat out other department stores. Macy’s continues to take market share from the likes of Penney and Kohl’s, in addition to smaller department store chains like Dillard’s, BonTon and others.

Luxury retailer Saks Inc. impressed on both a total and same-store sales basis, up 7.2% and 10.5%, respectively. Stage Stores was the top performing traditional department store in total sales, which rose 2%, but was disappointed with its results. Total sales at  Limited Brands were flat due to the divesting of its third-party sourcing business and the closing of several La Senza doors, but comps were up 9% due to impressive gains at Victoria’s Secret.

Several other top merchants fell short in January. Kohl’s results disappointed for the third month in a row, with total sales up by only 2.3% (though much better than November and December) and comps ahead negligibly. The warm weather was apparently a problem, as outerwear and winter accessories sat virtually untouched. 

Other retailers missing expectations include The BonTon, Steinmart, Dillard’s, Wet Seal and Cato, all of which suffered declining January sales.

Gap turned in a better than expected same-store sales decline of 4%. Target blew past expectations, with total sales up 5.1% and comps ahead 4.3%. Sales picked up nicely in both discretionary and non-discretionary categories.   

The present situation index fell by 8 points, much more than the expectations index, which fell by less than one point. Have consumers lost their faith? It is more likely, given the contast in view between present and future expectations, that they feel the recovery is proceeding too slowly, and that although they think things will get better, they don’t yet feel that improvement. 

Although the growth gap between overall spending and apparel has been narrowing in recent months, apparel spending growth outpaced that of overall spending for the 20th month in a row. In December, apparel and footwear increased slightly their “share of wallet” – or percentage of total consumer spending, evidence of the fact that apparel continues to be a very popular holiday gift category.

After steadily accelerating for several months through October, spending growth on apparel and footwear slowed for the second month in a row, rising only 4.8% on a 12-month smoothed basis, with much of the difference due to slower spending on adult apparel. Apparel prices rose by 4.6% in the month, higher than the overall inflation rate but lower than November’s rate.

Spending on apparel increased 4.9%, while that of footwear rose 4.2%.

 Women’s spending grew by 5.1%, while men’s was up by only 4.8%, both lower than last month’s growth. Children’s was the only segment to see an uptick in spending growth, of 4.1%, continuing a trend we’ve seen for the last few months.