Retail Sales in U.S. Drop by 0.1% During December

American Consumers during December curbed spending, making for a lackluster end to the year that was marked by slowing consumption despite the labor market steadily improving and months of inexpensive gasoline.

Sales at restaurants and retail stores were down by 0.1% from November to $448.1 billion during December, the Department of Commerce announced on Friday. Compared with the previous year, sales were up 2.1%, the slowest increase during the now six-year expansion.

Economists surveyed expected a drop in December of 0.1%. Retail sales were up 0.4% during November from the originally reported gain of 0.2%.

The sales slump in December was broad based with consumers spending less on clothing, accessories, general merchandise, gasoline and groceries.

Excluding autos, sales were down by 0.1% for December and excluding gasoline, they were unchanged. Excluding both of those categories, sales were flat for the month.

Consumer spending is a big driver of the economy representing over two-thirds of the output in the economy.

Household consumption helped the economy expand in the most recent quarters despite the affects from the stronger dollar as well as weak overseas demand, which have weighed on exporters in the U.S.

Data from retail sales, which are an important gauge for overall spending by consumers, can be highly volatile month to month. Growth in sales decelerated over the last year, reflecting the declines in sales of gasoline, appliances, electronics and in department stores.

Sales overall were up only 2.1%, which was a marked downturn from the gain of 3.9% in 2014.

Slumping prices of oil have held sales down over the last year as well, as consumers spent less money for gas due to prices being lower. In December, sales across service stations dropped by 1.1% and were off 19.4% from one year earlier.

The report on Friday also showed that consumers increased spending at building supply, garden centers, furniture stores, restaurants and bars and at retailers online.

Other data recently released suggested that American might be starting to spend more as incomes begin to increase.

 

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