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Economy in Brief

U.S. Retail Sales Weaken At Yearend But 2009 Improved
by Tom Moeller January 14, 2010

d less evident at the end of last year's holiday shopping season. December retail sales slipped 0.3% last month though the November increase was revised up to 1.8% from 1.3% reported last month. The latest figure was weaker than Consensus expectation for a 0.5% rise. Reinforcing the notion of a weak end to 2009 was a 0.3% decline retail sales less autos after an upwardly revised 1.9% jump in November sales. Aside from the monthly volatility, however, the trend in retail spending improved. On a three-month basis, retail sales rose at an 11.3% annual rate through December, by far improved from the 29.7% rate of decline one year earlier. Less autos, the rate of spending also recovered to 7.1% from negative 28.9% at its depths.

Higher gasoline prices obviously played a part in the retail sales picture. Gasoline purchases rose 1.0% last month and they're up by one-third from last year. Yet without gasoline there still has been firming in spending. Less autos & gasoline retail sales fell 0.3% last month after a 1.0% November jump. On a three-month basis, these sales rose at a 3.1% rate, up from the worst of -12.2% at the end of 2008.

It's been internet & catalogue purchases that have shown the bulk of the improvement in retail spending. These sales rose 1.4% in December (10.3% y/y) after similar increases during the prior three months. The three-month rate of gain rose to 21.2% from a negative 22.5% at the end of 2008.

Motor vehicle sales slipped 0.8% last month after a 1.2% November increase and a 7.4% October gain. Reflecting price discounts, these changes lag the increases in unit vehicle sales. Elsewhere, discretionary "core" spending improved some but it's been less pronounced. Sales at furniture & appliance stores fell 1.2% during December (-2.2% y/y) after a 1.8% November increase. The three-month rate of growth improved to -0.9% from -25.9% at its worst. Sales at furniture stores alone rose 0.3% after a 0.7% November gain and three-month growth improved to 0.3% from -21.6% at its worst. Sales of electronics & appliances fell 2.6% (-0.7% y/y) and reversed all of the November increase. Three-month growth slipped to -2.0%. In soft goods, apparel store sales slipped 0.6% (+5.0% y/y) for the third consecutive monthly decline. General merchandise store sales fell 0.8% (+2.1% y/y) while three-month growth improved to 1.7% from -11.2% at its worst late in 2008.

The retail sales data are available in Haver's USECON database.

The Federal Reserve's most recent Beige Book covering regional economic conditions an be found here

  December November October Y/Y 2009 2008 2007
Total Retail Sales & Food Services (%) -0.3 1.8 1.3 5.4 -6.0 -0.8 3.3
  Excluding Autos -0.2 1.9 -0.0 5.2 -4.7 2.4 3.9
    Non-Auto Less Gasoline -0.3 1.0 0.1 2.3 -1.8 1.6 3.6
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