In the great game of trying to gauge the direction of the economy (it's up! No, it's down!), retail sales are considered a key indicator. And sales numbers released this week indicate a recovery is, indeed, on the way. If only it were that simple.

Retailers across product categories reported higher than expected sales in January, beating Wall Street expectations and in some cases, the retailer's own projections. Wholesale clubs BJ's and Costco had particularly strong showings in January, with sales of stores open at least a year rising 8.4% and 8% respectively.


Other positive surprises were Limited Brands, Macy's and The Gap. Higher-end department store Nordstrom's saw same store sales increase a whopping 14%, and Kohl's rose 6.5%, making it the third largest department store after Sears and Macy's. Not all retailers enjoyed strong sales. Target's monthly comparable gains went up just .5% and JC Penney's actually dropped 4.6%.

Holiday sales, pre-holiday sales and now post holiday sales, have all been pretty healthy. At least compared to last year when declines were everywhere. That retail sales climbed four months in a row leads analysts to believe an economic recovery is really at hand.

But wait, it's not all such good news. Unemployment numbers are still scary, if confusing. The only thing keeping the unemployment rate from being even higher is the fact that so many people have simply given up and stopped looking for work -- more than one million in all. The government can't include data about people who fall off the unemployment rolls.

As consumers, we've done our part and returned to consuming, albeit to a lesser degree than before. Continued strong retail numbers may lead stores to begin expanding and hiring again. At least it's a little bit of good news in the new year.

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