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15 Jan 2016
Commerce Department reported US retail sales fell 0.1 per cent in December
FXStreet (Mumbai) - U.S. retail sales declined in December. It fell 0.1 per cent thereby ending the weakest year since 2009. Retail sales had grown 0.4 per cent in November. The Commerce Department today showed sales at retail stores and restaurants fell 0.1% from the previous month’s figures to a seasonally adjusted $448.1 billion in December. Sales grew just 2.1% in 2015 compared with a year earlier, marking the slowest increase in the six-year expansion. Excluding motor vehicles, sales were down 0.1% in December. Today’s data has once again raised concern about consumer spending.
The fact that retail sales remained weak across categories like electronics stores, clothing merchants and grocers goes on to show that American consumers are more will to hold the extra money saved as a result of oil slump, and not splurge it. Wage gain in the past months has not been as expected and this might further hinder spending.
Sales decreased 0.9 per cent at clothing chains and 0.2 per cent at electronics stores. Warm weather led to drop in sales of winter ears hurting overall sale of apparel. Industry figures posted in January showed purchases of cars and light trucks came in at a 17.2 million annualized rate in December, the slowest since July 2015.
After 0.5 per cent increase in the so-called retail control group in November, the figures dropped 0.3 per cent in December, the biggest decrease since February.
Recent reports have highlighted the fact that the November-December holiday season proved to be a mixed one for retailers. On one hand, same-store sales fell for Macy’s Inc., Best Buy Co. while on the other hand it increased for those like J.C. Penney Co. Same-store sales account for about 17 percent of total retail sales.
The Fed had raised rates last month after having kept it at record low level for almost a decade believing that economy progressing well on the recovery track. The robust labor market boosted the Fed’s confidence.
However, the fact that inflation remains way below the Fed’s target continues to worry the policy makers. At a time when growth in the manufacturing sector and exports are declining as a result of strong dollar and weak oil, it is the consumers who have propelled growth. Consumer spending represents more than two-thirds of economic output and retail sales figure help markets understand the consumer’s willingness and ability to spend.
Therefore, a drop in retail sales is not a welcome sign for the economy. Drop in gasoline prices are already keeping prices in check. Sales at gas stations fell 1.1% in December and were down 19.4% from a year earlier. Considering these factors, it can be said that Fed’s objective of raising inflation to 2 per cent target cannot be achieved any time soon.
President Barack Obama’s top economic advisers however feel that strong consumer spending will remain the key driver of economic grow this year despite global headwinds. Jason Furman, chairman of the White House Council of Economic Advisers, said “I personally would place more weight on the domestic part of that story,”
The fact that retail sales remained weak across categories like electronics stores, clothing merchants and grocers goes on to show that American consumers are more will to hold the extra money saved as a result of oil slump, and not splurge it. Wage gain in the past months has not been as expected and this might further hinder spending.
Sales decreased 0.9 per cent at clothing chains and 0.2 per cent at electronics stores. Warm weather led to drop in sales of winter ears hurting overall sale of apparel. Industry figures posted in January showed purchases of cars and light trucks came in at a 17.2 million annualized rate in December, the slowest since July 2015.
After 0.5 per cent increase in the so-called retail control group in November, the figures dropped 0.3 per cent in December, the biggest decrease since February.
Recent reports have highlighted the fact that the November-December holiday season proved to be a mixed one for retailers. On one hand, same-store sales fell for Macy’s Inc., Best Buy Co. while on the other hand it increased for those like J.C. Penney Co. Same-store sales account for about 17 percent of total retail sales.
The Fed had raised rates last month after having kept it at record low level for almost a decade believing that economy progressing well on the recovery track. The robust labor market boosted the Fed’s confidence.
However, the fact that inflation remains way below the Fed’s target continues to worry the policy makers. At a time when growth in the manufacturing sector and exports are declining as a result of strong dollar and weak oil, it is the consumers who have propelled growth. Consumer spending represents more than two-thirds of economic output and retail sales figure help markets understand the consumer’s willingness and ability to spend.
Therefore, a drop in retail sales is not a welcome sign for the economy. Drop in gasoline prices are already keeping prices in check. Sales at gas stations fell 1.1% in December and were down 19.4% from a year earlier. Considering these factors, it can be said that Fed’s objective of raising inflation to 2 per cent target cannot be achieved any time soon.
President Barack Obama’s top economic advisers however feel that strong consumer spending will remain the key driver of economic grow this year despite global headwinds. Jason Furman, chairman of the White House Council of Economic Advisers, said “I personally would place more weight on the domestic part of that story,”