Payroll Tax Hike: Killer Whale or Red Herring?

Consumers could keep spending and save less money. The job market is improving and so is the housing market.

LaVorgna noted that people have continued to buy more expensive items like cars and trucks, a trend that "seems to run counter to the payroll tax hype, blaming it for all the problems."

In general, economists say, the picture is far more complicated than a small reduction in take-home pay. People may be saving for biggest expenses while cutting back on items typically considered staples.

In its earnings announcement, Home Depot (HD) said sales were strongest of items that cost $900 or more -- hardly the marginal purchases that midlevel restaurant chains must worry about, says Brian Sozzi, a retail industry analyst with NBG Productions. The company also did brisk business in flooring, a product set that tends to track renovation activity, a broad driver of spending.

There's no reason to believe the companies are being dishonest about why sales may have weakened. But focusing on the payroll tax, a political hot-button, may be a red herring.

"This might be bad for some companies and very good for others," Greenhaus says. Which companies fall into which group, he said, won't be clear for a few more months.

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AP Business Writers Christopher Rugaber in Washington and Christina Rexrode in New York contributed to this report.

Daniel Wagner can be reached at www.twitter.com/wagnerreports.

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