December retail sales tumble on gas prices, weak holiday spending (+video)
Retail sales took a sharp fall in December thanks to underwhelming holiday sales and low gas prices, according to the Commerce Department. Still, the fall in retail sales is probably not the start of a weak trend given lower gasoline prices and a firming labor market.
Nam Y. Huh/AP/File
A gauge of U.S. consumer spending unexpectedly fell in December as demand fell almost across the board, but that is probably not the start of a weak trend given lower gasoline prices and a firming labor market.
The Commerce 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)