HDT file photo

HDT file photo

Retail sales in the U.S. fell in December by the largest amount in nearly a year, according to a new Commerce Department report.

The 0.9% drop from November is the largest since January 2014. Excluding sales of gasoline, overall retail sales fell 0.4% while it fell 1% when sales of autos are excluded.

The department also revised downward the October to November improvement in overall retail sales from 0.7% to 0.4%.

Compared to December 2013, retail sales last month increased 3.2%. Sales for all of 2014 were 4% higher than a year earlier, down slightly from a 4.1% in 2013 and the smallest gain since 2009. Part of the reason for the 2014 number from a year earlier is a decline in gasoline sales. Excluding them, total retail sales last year increased 4.8%.

The bottom line, said Sterne Agee Chief Economist Lindsey Piegza, is the gasoline price reprieve has helped consumers, translating into a savings of hundreds of dollars over the past few months. However, rising costs elsewhere, including health care and low earnings growth, stunted sales at year-end.

“The trend in consumer spending remains positive, but far from robust, spelling trouble for the more optimistic forecasts for growth at the end of the year, and early 2015 for that matter,” she said. “Coupled with disinflation in terms of wages and rapidly plunging oil prices, this morning's larger-than-expected decline in consumer spending further supports an argument for a more extended timeline for rate increases” [in interest rates by the Federal Reserve].

A separate report from the National Retail Federation, also released Wednesday, showed retail sales over the previous Christmas holiday increased 4%, just below the group’s earlier forecast of a 4.1% increase, according to CNBC. It also noted a report a few days earlier the analytics firm ShopperTrak showed holiday retail sales increased 4.6% from the previous year, higher than its earlier forecast of a 3.8% gain and its best performance since 2008.

About the author
Evan Lockridge

Evan Lockridge

Former Business Contributing Editor

Trucking journalist since 1990, in the news business since early ‘80s.

View Bio
0 Comments