Sales at US retail stores were sluggish in December despite the Christmas holiday shopping season, the US government reported today in the latest sign that consumers were tightening their purse strings in the face of worries about a slowing economy.
Total retail sales increased fractionally - by 0.1 per cent to $271.34 billion - but that followed revised back-to-back drops of 0.5 per cent and 0.1 per cent in November and October respectively.
The overall December sales figure beat Wall Street economists' forecasts for a 0.4 per cent decline in sales, but the figure excluding autos was softer than their prediction of a 0.1 per cent pickup.
Surprisingly, new-car sales rose 0.3 per cent to $66.44 billion in December after plunging 1.3 per cent in November and 0.7 per cent in October. Domestic auto dealers have reported their unit sales weakened sharply in December to two-year lows but some dealer financing incentives were lifted, at least temporarily, as the year ended which could account for the dollar value of sales rising.
In a sign of weakening consumer demand, sales at general merchandise stores slumped 0.8 per cent to $34 billion after falling 0.3 per cent in November.
Last week, the Federal Reserve cited its concern about softening demand when it aggressively cut interest rates in a surprise move between regularly scheduled meetings of its rate-setting Federal Open Market Committee.
Reuters