U.S. Retail Sales Weak, Cast a Cloud on Consumer Spending

Grow Your Business, Not Your Inbox

Stay informed and join our daily newsletter now!
2 min read
This story originally appeared on Reuters

A gauge of U.S. unexpectedly fell in December as demand fell almost across the board, but that is probably not the start of a weak trend given lower prices and a firming labor market.

The Department said on Wednesday retail sales excluding automobiles, gasoline, building materials and food services fell 0.4 percent last month after a 0.6 percent rise in November.

The so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.

Economists polled by Reuters had expected core retail sales to rise 0.4 percent last month.

December's surprise decline could temper expectations that consumer spending, which accounts for more than two-thirds of U.S. economic activity, accelerated sharply in the fourth quarter.

But with the labor market strengthening and gasoline prices continuing to fall, December's decline in core retail sales will likely be temporary.

Core sales last month were weighed down by a 1.6 percent decline in receipts at electronic and appliance stores, as well as a 0.3 percent fall in sales at clothing stores. Online sales slipped 0.3 percent. There were also declines in receipts at sporting goods stores.

Core sales were up 3.2 percent from a year earlier.

Receipts at furniture stores rose 0.8 percent in December.

Elsewhere, declining gasoline prices weighed on service station sales, with receipts falling 6.5 percent - the biggest decline since December 2008.

That decline combined with a 0.7 percent fall in receipts at auto dealerships to push down overall retail sales 0.9 percent, the largest decline since January last year.

November retail sales were revised down to show a 0.4 percent increase instead of the previously reported 0.7 percent advance.

Sales for building materials and garden equipment fell 1.9 percent in December, while sales at restaurants and bars rose 0.8 percent.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

More from Entrepreneur

Get heaping discounts to books you love delivered straight to your inbox. We’ll feature a different book each week and share exclusive deals you won’t find anywhere else.
Amplify your business knowledge and reach your full entrepreneurial potential with Entrepreneur Insider’s exclusive benefits. For just $5 per month, get access to premium content, webinars, an ad-free experience, and more! Plus, enjoy a FREE 1-year Entrepreneur magazine subscription.
Discover a better way to hire freelancers. From business to marketing, sales, finance, design, technology, and more, we have the freelancers you need to tackle your most important work and projects, on-demand.

Latest on Entrepreneur