As consumers contained their spending at the end of 2018, a consumer spending indicator posted its biggest decline in a decade. Retail sales fell by 1.2 percent in December on a seasonally adjusted basis to reach $505.8 billion, while economists in one survey had forecast a 0.1 percent rise in sales, The Wall Street Journal reported.
During the month, all major retail categories with the exception of building materials as well as motor vehicles fell. Sales at book and sporting goods retailers fell by 4.9 percent from the prior month, as department store sales slid by 3.3 percent. In addition, sales at personal care and health stores slipped by 2 percent. Gas station sales fell by 5.1 percent from the month before, although the paper pointed out that gas prices on average fell from $2.65 a gallon in November to $2.37 in December.
And sales at non-store retailers — such as Amazon.com — fell by 3.9 percent. At the same time, restaurant sales slipped by 0.7 percent from the prior month. That category, according to the paper, “isn’t closely tied with holiday gift-giving.” Overall, retailers in the U.S. have recently showed robust sales but consumer confidence has taken a hit with the government shutdown as well as uncertainty around the markets.
The news comes as control retail sales increased in November and increased over expected levels. Control sales, which does not include food services, building materials, automobiles and gas, rose by 0.9 percent month-on-month at the time. That was ahead of expectations of a 0.4 percent increase. And furniture sales rose by 1.2 percent, while electronic sales jumped by 1.4 percent. Sales of gasoline, however, declined by 2.3 percent.
MFR Chief U.S. Economist Joshua Shapiro said, according to FT in December, that the “report appears to point toward somewhat faster growth in Q4 than we have been forecasting, although much will depend on December retail sales results as well as data on the enormous service sector which are not yet available.”