Market Watch: Retail sales sink 1.2% in December in
worst plunge in nine years
at retailers fizzled in December and posted the biggest decline in nine years in
a worrisome sign for the U.S. economy, according to a long-delayed government
Retailers faced plenty of headwinds in
December, including a stock-market meltdown, sudden talk of recession, the start
of the partial government shutdown and a bout of unusually poor weather.
Yet the large decline in sales appears to go beyond that and offers more proof
the economy slowed toward the end of 2018. Sales fell in every retail
category except auto dealers and home centers.
What’s was surprising was a 3.9% reported decline in sales at internet sellers.
That would mark the sharpest drop since November 2008 — the middle of the last
Less surprisingly, sales tumbled 3.3% at department stores. Sales also fell at
bars, restaurants, apparel stores, grocers, home furnishers, pharmacies and
outlets that sell hobby items such as books and sporting goods.
These data are so wild that we have to expect hefty upward revisions, but if
they stand, they are very unlikely to be representative of the trend over the
next few months. The consumer is no longer enjoying tax cuts or falling gas
prices, but that’s no reason to expect a rollover,” said Ian Shepherdson, chief
economist at Pantheon Macroeconomics.
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NRF: 2018 holiday sales grew 2.9% amid turmoil over
trade policy and delay in data collection
retail sales during 2018 grew a lower-than-expected 2.9 percent over the same
period in 2017 to $707.5 billion, the National Retail Federation said today
after the Commerce Department released data that had been delayed by nearly a
month because of the recent government shutdown.
The numbers, which exclude automobile dealers, gasoline stations and
restaurants, fell short of
NRF’s forecast last fall that holiday sales from November 1 through December
31 would grow between 4.3 percent and 4.8 percent to between $717.45 billion and
The total includes $146.8 billion in online and other non-store sales, which
grew 11.5 percent over 2017. NRF had forecast that the online sector of retail
would grow between 11 percent and 15 percent to between $151.6 billion and $157
November – the first half of the holiday season – grew 5.1 percent unadjusted
year-over-year. But December was up only 0.9 percent year-over-year and down 1.5
percent seasonally adjusted from November. NRF does not count October as part of
the holiday season, but much holiday shopping has shifted earlier, and October
was up 5.7 percent year-over-year. As of December, the three-month moving
average was up 0.7 percent over the same period a year ago.
“Today’s numbers are truly a surprise and in contradiction to the consumer
spending trends we were seeing, especially after such strong October and
November spending,” NRF Chief Economist Jack Kleinhenz said.
NRF’s numbers are based on data from the U.S. Census Bureau, which said today
that overall December sales – including auto dealers, gas stations and
restaurants – were down 1.2 percent seasonally adjusted from November but up 2.3
percent unadjusted year-over-year.
Year-over-year results from key retail sectors during the November-December
holiday season include:
Online and other non-store sales up
11.5% at $146.8 billion.
Clothing and clothing accessory up
4.2%at $61.7 billion.
Health and personal care up 2.6% at
General merchandise up 2.3%at $146.8
Grocery and beverage up 1.9%at $130.5
Building materials and garden supply up
1.6%at $61.5 billion.
Electronics and appliance up 0.2% at
Furniture and home furnishings stores
were unchanged at $22.6 billion.
Sporting goods stores down 13.5% at $16
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