Retail sales in the US in December -1.9% against the expected 0.0%.


Retail sales in the US in December -1.9% against the expected 0.0%.

  • Prior was +0.3% (revised to +0.2%)
  • Ex-autos -2.3% against + 0.2% expected
  • Previous ex-autos +0.3% (revised to +0.1%)
  • Control group -3.1% against +0.1% expected
  • Previous control group -0.1% (revised to -0.5%)

There were some significant twists and turns about a soft reading in retail sales due to credit card usage data, and that turned out to be the case. The figures were even worse than speculated with the largest drop in the control group – which excludes oil, gas and building materials – since February 2021.

I have been writing for years how December retail sales tend to be missed due to the secular trend of previous holiday shopping, and this was especially the case this year due to shipping concerns. Later, the lack of spending was exacerbated by omicron.

Highlights:

  • Furniture and home furnishings -5.5%
  • Electronics & Appliances -2.9%
  • Clothes -3.1%
  • Out-of-store retailers (online) -8.7%
  • Food service and beverages -0.8%

Some of this suggests a general normalization of expenditure. An underreported story is how strong retail spending has been, especially on goods. If you look at the numbers from year to year compared to December last year, it is illustrative:

  • Furniture and home furnishings + 11.1%
  • Electronics and appliances +14.6%
  • Clothes +29.5%
  • Out-of-store retailers (online) +10.7%
  • Food service and beverages + 41.3%
  • Total retail sales å / å +16.9%

So even though this report missed expectations, it was still a much better holiday season than a year ago. It is similar – if not stronger – if we aggregate October-Dec with virtually all categories up in double digits.

Some of it helps to explain why the market has taken this in stride. I also strongly suspect that merchants were positioned for a negative miss, given the credit card data.

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