· Retail
sales in December fell for the sixth consecutive month. Worse yet, the
9.8% year-to-year decline was a postwar record. The 2.7% drop last month
followed declines of 2.1% and 3.4% during November and October which
were greater than reported initially. Consensus expectations had
been for a December sales decline of 1.2%. The retail sales data are
available in Haver's USECON database.
· Again in December, lower vehicle sales and lower gasoline prices accounted for much of the overall decline in sales. However, even excluding these two areas, sales fell 1.5% and the 0.2% November decline was downwardly revised from the initial report of a slight uptick. Year-to-year, excluding autos and gasoline, sales fell 2.2% which also was a record.
· Motor vehicle & parts sales slipped just 0.7% last month but they have declined in all but one month since last November. Year-to-year, dollar sales are down by one quarter. However, that decline is less than the more than one third y/y drop in unit sales of motor vehicles.
· Lower prices continued to pull sales
at gasoline service stations lower. Last month they fell 15.9% (-35.5%
y/y) after like declines during the prior two months. That momentum
stalled this month as gasoline prices have ticked slightly higher versus
the December average. 
· Hard-good sales were notably lower during December. Sales at furniture and electronics & appliance stores took a 1.4% (-8.8% y/y) slide and the 0.4% November uptick was significantly lowered. Furniture store sales fell 1.8% (-13.2% y/y) for their seventh consecutive monthly decline. Sales of electronics & appliances fell 1.0% (-4.2% y/y) after a downwardly revised 1.5% November increase.
· In the soft goods area, apparel store sales dropped 2.5% for their fourth sharp monthly decline in the last five months. At general merchandise stores, the news wasn't much better as sales fell 1.3%; however, they posted a year-to-year decline of -0.4%.
· Dining out became another casualty of the current recession. Restaurant & drinking place sales fell 2.2% last month and the y/y decline of 0.5% compares to 5.2% growth during 2007. For all of 2008, restaurant sales rose a modest 3.5%.
· Building materials sales continue to tumble with the drop off in housing. The 2.9% December drop was similar in size to the declines of the prior two months and it was the fifth consecutive large monthly shortfall.
· Sales at nonstore (internet)
retailers also have been hit hard. The 1.9% decline last month (-5.3%
y/y) was the sixth in a row.
· The Mismeasured Personal Saving Rate Is Still Useful: Using Real-Time Data to Improve Forecasting from the Federal Reserve Bank of Philadelphia can be found here.
· Commitment Versus Discretion in Monetary Policy, also from the Federal Reserve Bank of Philadelphia, is available here.