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Retail sales drop a disappointing 0.9% in December

Retail sales drop a disappointing 0.9% in December

Retail sales fell sharply in December on waning holiday sales and falling gasoline prices. Consumer purchases declined 0.9%. Economists expected a 0.1% increase. Excluding volatile auto purchases, sales dropped 1%. Economists expected a 0.1% rise. So-called core sales, excluding autos and gasoline, fell 0.3%. Also, November’s 0.7% jump in retail sales was revised down to 0.4%.635539711780587746-AP-WALMART-HOLIDAY-KICK-OFF-68415438

The report raises questions about the strength of consumer spending, which has shown signs of accelerating recently. Last month, motor vehicle sales fell 0.7%, pausing after rising sharply in previous months. And sales fell 1.6% at electronics stores, 0.3% at clothing retailers and 0.9% at general merchandise stores. Even online sales slipped 0.3%.

Meanwhile, gasoline station sales plunged 6.5% on the sharp drop in pump prices. Furniture store sales rose a solid 0.8% and health and personal care stores increased 0.5%. Tepid wage growth continued to constrain consumer spending late last year but tumbling gasoline prices left shoppers a windfall of extra cash.

While sales on Black Friday were disappointing and retailers reported a mixed turnout in December, overall the retail industry is calling the holiday shopping season a success. With retailers offering more discounts across the entire shopping period instead of just on key days like Black Friday and Cyber Monday, shoppers had more chances to spend. The National Retail Federation said holiday sales increased 4% over November and December, making for the best holiday sales season since 2011.

Though NRF also reported a decline in December sales – down 0.9%, excluding autos, gas stations and restaurants – the industry group contributes the lack of month-to-month growth primarily to lower gas prices. Last week, technology company First Data that said holiday sales increased 3.2%. First Data only analyzed same-store sales, a metric that includes stores open at least a year.

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