U.S. retail sales edged down 1.9 percent in December, in tandem with a 0.3-percent decline in industrial production, its first slip since September, attributed to supply-chain problems, according to data from the U.S. Federal Reserve and commerce department released 14 January.
Excluding autos, which still are selling briskly, consumer sales fell 2.3 percent, defying Dow Jones’ expectation of a 0.3-percent rise.
Dow Jones had forecast only a 0.1-percent dip in consumer purchasing.
The dollar volume of sales is not adjusted for inflation, meaning that the real magnitude of the losses is greater than the figures indicate.
Also in December, the consumer price index added 0.5 percent, with wholesale prices up 9.7 percent for the month, the biggest one-month jump since at least 2010.
December’s news, combined with bank earnings reports showing lower quarterly profits, sent the Dow down for the day, while the NASDAQ and S&P managed slight gains (see related story in this issue).
December’s retail sales slipped, in part, because consumers had pushed holiday spending earlier in the calendar to ensure supplies, as we said would happen and noted in “Black Friday Got Darker” (7 Dec 2021).
Online sales sank by 8.7 percent, compared to the same period last year, electronics stores’ sales shrank 2.9 percent, furniture and home store takes were off 5.5 percent, and restaurants collected 0.8 percent less.
TREND FORECAST: The overall numbers will continue to move down as more draconian COVID War mandates are imposed in states, cities and by businesses. However, we maintain our forecast for a quick, but temporary, spike up in late March, mid-April, when the COVID War begins to wind-down.
Despite December’s retail slump, sales were up 16.9 percent year over year last month as the economy reopened and gained some momentum after the COVID-era shutdown.
Restaurants posted a 41.3-percent gain during 2021; gas station sales were up 41 percent over the past 12 months, but also took a December hit, sliding 0.7 percent.
TREND FORECAST: However, the restaurant numbers, as we reported in this Trends Journal, are now in decline, and will continue to drift lower over the next three months. (See “OMICRON RESTRICTIONS SINK DECEMBER RESTAURANT SALES” in this issue.)
And, as interest rates rise and Omicron fear continues, retail sales growth will grow at a slower pace this year.
Also, because of supply chain disruptions, many retailers received their holiday inventory deliveries too late, resulting in leftover merchandise that will be offered at discounts.