U.S. retail sales recorded their biggest drop in more than nine years in December as receipts fell across the board, suggesting a sharp slowdown in economic activity at the end of 2018.
The Commerce Department said on Thursday retail sales tumbled 1.2 percent, the largest decline since September 2009 when the economy was emerging from recession. Data for November was revised slightly down to show retail sales edging up 0.1 percent instead of gaining 0.2 percent as previously reported.
Economists polled by Reuters had forecast retail sales increasing 0.2 percent in December. Retail sales in December rose 2.3 percent from a year ago.
The December retail sales report was delayed by a 35-day partial shutdown of the federal government that ended on Jan. 25. No date has been set for the release of the January retail sales report, which was scheduled for publication on Friday.
Excluding automobiles, gasoline, building materials and food services, retail sales dropped 1.7 percent last month after a slightly upwardly revised 1.0 percent surge in November. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. They were previously reported to have jumped 0.9 percent in November.
December’s sharp drop in core retail sales suggested a moderation in the pace of consumer spending in the fourth quarter. Consumer spending, which accounts for more than two-thirds of the U.S. economy, increased at a 3.5 percent annualized rate in the July-September quarter.
Gross domestic product estimates for the fourth quarter are around a 2.7 percent rate. The economy grew a 3.4 percent pace in the July-September period.
In December, online and mail-order retail sales dropped 3.9 percent, the biggest drop since November 2008, after increasing 2.8 percent in November. Receipts at service stations dived 5.1 percent, the biggest fall since February 2016, reflecting cheaper gasoline prices.
There were also declines in receipts at clothing and furniture stores. Receipts at restaurants and bars fell 0.7 percent and spending at hobby, musical instrument and book stores plunged 4.9 percent, the biggest drop since September 2008.
But sales at auto dealerships rose 1.0 percent in December after advancing 0.7 percent in the prior month. Sales at building material
Read the full article at CNBC.