Retail Sales Slump in December
|Chief Economist, U.S. Chamber|
Retail sales fell a sizeable 1.1% in December. That is after a 1% drop in November. Consumer strength is wavering.
Why it matters: Surprising consumer strength has buoyed the economy since COVID, but it finally seems to be buckling under the weight of inflation.
- The broad weakness in the spending data shows no sectors are being spared from consumers pulling back.
By the numbers: Sales were down in almost all categories of spending:
- Motor vehicles and parts dealers (-1.2%)
- Furniture stores (-2.5%)
- Electronics and appliance stores (-1.1%)
- Health and personal care stores (-0.9%)
- Gas stations (-4.6%)
- Clothing and accessory stores (-0.3%)
- General merchandise stores (-0.8%)
- Food and drinking places (-0.9%)
But: Sales were up at:
- Building material and garden supply stores (0.3%) and
- Sporting goods and hobby stores (0.1%)
Be smart: There is an ongoing shift in consumer spending from goods to services and experiences. Spending on those is not included in this data.
- Overall spending may be stronger once accounting for that, but it is unlikely to be strong enough to offset the drop in spending on goods.
Bottom line: The drop in consumer spending has been long-anticipated. It is a major reason many forecasters predict a sluggish 2023.