The retail sales in the United States recorded their biggest fall in 11 months in the month of December amid declining demands from almost across the board, weakening the possibilities of a sharp acceleration in the consumer spending in the fourth quarter.
The economists, however, warned against too much reading into the surprise weakness, underscoring that the holiday spending made it tough to smooth the December data for seasonal fluctuations.
Steve Blitz, chief economist at New York-based ITG, said, “Faulty seasonal adjustments from shifts in holiday spending patterns are probably more to blame for the December decline. Looking at the last three months, spending is not collapsing.”
According to the Wednesday’s figures of US Commerce Department, the country’s retail sales declined 0.9 percent after increasing 0.4 percent in November last year.
This figures recorded in December is the biggest fall since last January.
The economists had, however, expected only a 0.1 percent decline in the sales.
According to the market analysts and financial experts, the strengthening labor market as well as lowering gasoline prices would help in getting the retail sales on track again in January. Some believes the December’s setback could be revised away.
Bricklin Dwyer, a senior economist at BNP Paribas in New York, said, “For January 2015, this seasonal factor will boost sales by the largest factor since 2006. This combined with the fact that we have seen a massive boost to consumers’ wallets as a result of the rapid decline in gasoline prices, suggests that January could be a big month that reverses much of the December drop.”
Another report by the National Retail Federation, which gathers a subset of retail sales excluding gasoline stations, automobiles and restaurants, showed the holiday sales in 2014 increased 4.0 percent from 2013, the fastest since 2011.
On the other hand, the Federal Reserve’s Beige Book showed the consumer spending rose during the holiday season, with moderate year-over-year gains in the retail sales.