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US retail sales were unexpectedly unchanged in December, putting consumer spending and the overall economy on a slower growth path heading into the new year.
The flat reading in retail sales last month followed an unrevised 0.6 percent increase in November, the Commerce Department’s Census Bureau on Tuesday. Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, would rise by 0.4 percent.
The Census Bureau is still catching up on data releases after delays caused by last year’s government shutdown.
Retail had been strong despite consumers being downbeat about the economy amid higher prices from tariffs and a softening labour market. That has come at the expense of saving, with the saving rate falling to a three-year low of 3.5 percent in November from 3.7 percent in October. It has dropped from a peak of 31.8 percent in April 2020. But household wealth has surged, driven by a strong stock market rally and still-high home prices.
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Apparel and accessories sales rose 1.1 percent from November. Retail sales excluding automobiles, gasoline, building materials and food services fell 0.1 percent in December after a downwardly revised 0.2 percent gain 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 advanced 0.4 percent in November.
December’s drop and the downward revision to November’s data could prompt economists to trim their fourth-quarter estimates for consumer spending and GDP.
Consumer spending increased at a brisk pace in the third quarter, driving much of the economy’s 4.4 percent annualised growth pace during that period. The Atlanta Federal Reserve is forecasting GDP increased at a 4.2 percent rate in the fourth quarter.
The government will published its delayed advance estimate of fourth-quarter GDP next week.
By Lucia Mutikani; Editor: Chizu Nomiyama
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US retail sales growth likely moderated a touch in September, capping an otherwise solid quarter of spending by consumers who are nonetheless frustrated by high prices and anxious about job security.
