U.S. retail sales fell sharply last month, Commerce Department indicated Wednesday, thanks to a pullback in gas prices and slump in automobile sales, as consumer continue to pare spending amid elevated inflation and an uncertain job market.
December retail sales fell 1.1% to a collective $677.1 billion, the Commerce Department said, well shy of the Street consensus forecast of a 0.8% decline. The figure is not adjusted for inflation, and includes overall sales of gasoline and other goods that have sharply declined in prices. The November total was revised to a decline of 1% from the original estimate of a 0.6% month-on-month decline, the report indicated.
Stripping out the auto sector, December retail sales were also down 0.7%, the Commerce Department report noted, while stand-alone sales of gasoline down 0.8% as prices eased to between $3.20 and $3.50 per gallon over month, according to data from the AAA motor club, compared to a range of between $3.60 and $3.90 per gallon over the month of November.
The closely-tracked control group number, which excludes autos, building materials, office suppliers, gas station sales and tobacco, fell 1.1%,, well ahead of analyst's estimates.
Inflationary pressures have eased notably over the past five months, as well, with the Bureau of Labor Statistics' headline December reading slowing to an annualized rate of 6.5%, the the lowest in more than a year.
U.S. stocks were modestly higher immediately following the data release, with futures contracts tied to the Dow Jones Industrial Average indicating a 55 point point opening bell gain and the S&P 500 moving 13 points to the upside.
Benchmark 10-year Treasury note yields edged lower to 3.441% following the data release while the dollar index was marked 0.5% lower on the session at 101.877 against a basket of six global currencies. Benchmark 2-year note yields eased to 4.146%.
Consumer strength will remain a key factor in the U.S. avoiding recession this year, with investors focused not only on the pace of retail sales but also on consistently firm data from the labor market
Jobless claims unexpectedly fell last week, Labor Department data indicated Thursday, with new applications for unemployment benefits pegged at just 205,000.
That followed a December employment report that showed 223,000 net new jobs were added to the economy last month, with moderating wage growth, as well as a Jolts report showing that around 10.45 million positions went unfilled over the month of November.
