US retail sales post 'solid' increase for December, economists say
By Alexander Bueso
Date: Thursday 16 Jan 2020
(Sharecast News) - Retail sales in the US grew more quickly than expected last month, although according to some economists, the details of the report pointed to household spending coming off the boil.
According to the Department of Commerce, in seasonally adjusted terms, US retail sales volumes increased at a month-on-month pace of 0.3% in December to reach $529.6bn (consensus: 0.2%).
Last month's rise was even more pronounced if sales of automobiles and parts are stripped out, jumping by 0.7% to $423bn (consensus: 0.5%).
And November's reading for total retail sales volumes was revised up by a tenth of a percentage point.
However, November's print for the so-called 'control measure' was revised down by half a percentage point, Ian Shepherdson at Pantheon Macroeconomics pointed out.
The control measure excludes sales of food services, car dealers, building-materials stores and gasoline stations and many economists believe it to be a more accurate guide of the underlying trend.
Thus, the downward revision meant that sales in the control group were now 0.3% lower at an annualised rate, a "dramatic" slowdown from the 6.0% rise seen in the third quarter and the 7.9% leap seen in the second.
It also meant that retail sales would be a drag on overall household consumption in the fourth quarter gross domestic product figures, he said.
Nonetheless, he added, as a whole the report was "solid" and "the y/y trend in the control measure is about 4-1/4%, in line with nominal after-tax income growth, so the Q4 softness will in all probability be followed by a clear rebound in Q1."
Furthermore, said Shepherdson, the 0.2% drop in non-store sales was conspicuously weak given that the Sundays after Thanksgiving and Cyber Monday both fell in December, so upwards revisions would not come as a surprise.
By categories, Building materials and Clothing registered the biggest increases in sales, rising by 1.4% and 1.6%, respectively, while Motor vehicle and parts dealers experienced a decline of 1.3%.
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