U.S. consumers retrenched from housing and credit turmoil in December, pulling overall retail sales down 0.4% for the month, the Commerce Department said Jan. 15. The report, the worst performance in six months, highlighted the spreading woes from housing and credit that hit consumers during the key holiday season. Analysts had expected a drop of 0.1% for retail sales, which are a key driver of overall economic activity.
Excluding automobiles, which can show wide fluctuations, sales were also down 0.4%. Auto sales fell 0.4% in December after a revised 1.4% decline in the prior month. Excluding autos and gasoline, retail sales fell 0.2% in December.
Over the full 12 months of 2007, retail sales were up 4.2% and rose 4.6% excluding autos.
The holiday gift-buying season did little to lift sales in a broad range of retail categories. Electronics and appliance store sales fell 1.9% in the month, the lowest since February 2006.
A separate report by the Labor Department showed inflation at the wholesale level cooled in December as producer prices fell 0.1%. The report showed tamer inflation after a strong 3.2% increase in the producer price index (PPI) in November. Core prices, which exclude volatile food and energy costs, showed a modest 0.2% rise in December after a 0.4% increase in November.
Copyright Agence France-Presse, 2008
