Shockingly Weak Retail Sales: Down 1.2% in December, Sharpest Decline Since 2009


Holiday retail spending came in shockingly bad. Retail sales fell 1.2 percent vs economists expectations of a rise.

The Econoday consensus estimate for retail sales was +0.1% in a range of -0.1% to +0.4%. No economist came close.

Retail sales fell 1.2 percent in December for the sharpest monthly decline of the expansion, since September 2009 and the last recession. The twist in the data is that vehicle sales, not really part of the holiday season, contributed strongly to December's results and excluding which sales fell 1.8 percent.

Aside from autos, the only other major component that was not in the minus column was building materials, up 0.3 percent for a group that is also not part of the holiday season. A major 3.9 percent drop for nonstore retailers headlines the details and points to a disappointing holiday for e-commerce. Sales at apparel stores fell 0.7 percent in December with department stores down 3.3 percent. Restaurant sales lost 0.7 percent for a second month in a row. Exaggerating December's downside was a 5.1 percent drop in gasoline sales that reflected price effects.

The year-on-year rate for total sales tells the story, falling nearly 2 percentage points to 2.3 percent for its lowest reading since late 2016. These results may reflect consumer edginess going into the government shutdown but they contrast very starkly with strength in the labor market. But the upshot is: confidence and consumer spending have moved to 2-year lows.

Recession Bells

I hear bells. Recession bells.

This data matches yesterday's report of rising delinquencies in both autos and credit cards.

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Also, recall Trade Deficit Shrinks in November Primarily Due to Falling Imports.

It appears consumers are finally tapped out.

Mike "Mish" Shedlock

Comments (7)
No. 1-5

Not surprising given how the stock market was doing during holiday season. The wealth effect of the market dissipated. It would be better to look at January numbers as a leading indicator.


How much of a factor was the government shutdown? That had to weaken sales in in the last week or so of the month. If it's a part of the explanation, January should be awful, with some recovery in February.


Thanks Trump, GDPNow for 2018Q4 nosedived to 1.5%


If nothing else, heads up on those published numbers, explains the "Fed will be patient (with interest rate increases)" and "QE as a regular policy tool" preparation of the drone army for permaintervention, that the Fed has been going through in the past weeks.....

Doesn't matter if not even a single worker can afford to buy a single Christmas gift anymore: No bloody way is the Fed going to let its protected classes of asset pumping profiteers, lose a single dime on their "portfolios."


Shockingly bad? When you have an unemployment crisis, as America has, with deflationary overcapacity in almost every sector globally, its no wonder such happens. The statistics can only be faked for so long.

Global Economics