Washington: The US Commerce Department delivered the final verdict on holiday spending last week, releasing data that showed sales dropping off unexpectedly in December despite improving from the year before.
Total retail sales fell 0.3 per cent from November to December, with a particularly large decline in sales of consumer electronics. Excluding cars, petrol and restaurants, sales dipped 0.5 per cent, according to an analysis by the National Retail Federation, a trade group.
"Certainly, the consumer is weaker than expected," said Ned Douthat, vice president of Ockham Research, a financial research firm. He called the results "a pretty big disappointment".
Critical month
December is a critical month for the retail industry, the culmination of the Christmas shopping season and traditionally the biggest sales month of the year. The drop in spending underscores just how fragile consumers remain, particularly as unemployment stays in the double digits.
Industry analysts had been hoping for a positive report after encouraging sales reports the week before last from about three dozen of the nation's biggest retail chains. They showed sales at established stores were up 2.8 per cent from a year before, and several companies even raised their earnings forecasts on the good news.
But those results compared December sales at established stores to those of December 2008, when the fallout from the financial crisis had left Americans shell-shocked. When the government's sales data for December are compared with a year ago, they show total retail sales jumped 5.4 per cent, more in line with the increases individual retailers reported last week.
