December Retail Sales Fall In Line With Forecasts

Date: January 18, 2016

Sales Down For Month, But Still Higher Than In December 2014

According to the latest Commerce Department data, December retail sales declined by 0.1% to $448.1 billion. Despite the decline, sales were up 2.2% from December 2014 and up 2.1% for 2015 as a whole. However, December saw declines across core retail sales, which fell 0.3%. This category excludes autos, building materials, food services, and gasoline. In a bright spot, sporting goods, hobby, book, and music stores all saw a 7.6% increase in sales from December 2014. Non-store retailers also saw an increase, up 7.1% from December 2014. According to Bloomberg News, December’s results were in line with economists’ expectations. The slowdown, “including electronics stores, clothing merchants and grocers, indicates Americans probably preferred to stock away the savings from cheaper fuel instead of splurging during the holiday season.” The New York Times reported that most of the decline “came down to a drop in retail revenue among sellers of gasoline because of the lower gas prices. Growth in car sales also slowed slightly in December, after a bumper year for the auto industry.” The AP reported that overall, the Commerce Department data show “consumer tastes shifting toward restaurants and online shopping,” and the “extra savings from falling gas costs have yet to fuel large spending gains in other retail categories. Still, some economists viewed the sales data as a positive reflection of the 2.9 million jobs added in 2015.”

What This Means For Small Businesses

Small businesses, particularly those in the retail sector, typically rely on December revenues for a significant amount of their yearly revenue. News of slightly lower retail sales is troubling, as it suggests that US consumers are still feeling uncertain about the economy and saving, rather than spending in their local communities.

Additional Reading

The Wall Street Journal also covered the story.

Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.

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