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Economy in Brief

U.S. Retail Sales Post Broad-Based Declines Led by Lower Gasoline Prices
by Tom Moeller  January 14, 2015

Overall retail sales including food services declined 0.9% (+3.2% y/y) during December following a 0.4% November increase, revised from 0.7%. No change in sales had been expected in the Action Economics Forecast Survey. Sales excluding autos fell 1.0% (+1.9% y/y) after a 0.1% November uptick, revised from 0.5%. A 0.1% uptick had been expected. During all of last year, sales improved 4.0%, about the same as in 2013. Sales excluding autos gained 3.0% in 2014, also roughly the same as the year before. During the last ten years, there has been a 58% correlation between the y/y change in retail sales and the change in disposable personal income.

Lower gasoline prices pulled the value of total December sales lower with a 6.5% drop (-14.2% y/y), the seventh straight month of decline. Fewer auto sales also weighed on the total with a 0.7% falloff (+8.6% y/y) following a 1.6% gain. This retreat reflected a 1.7% drop in unit sales. In addition, sales of building materials were off 1.9% (+5.2% y/y). Sales excluding these three categories fell 0.2% (+4.0% y/y), the first decline since January. For all of last year, the 3.7% gain was improved from a 3.1% rise in 2013.

Sales of other discretionary goods were uneven last month. Sales of electronics & appliance stores declined 1.6% (+6.8% y/y), the second sharp drop in three months, but sales at furniture & home furnishings outlets gained 0.8% (5.8% y/y), the third rise in as many months. Falling by 0.9% (+1.4% y/y) were general merchandise store sales, the third drop in four months, and apparel store sales which were off 0.3% (+3.8% y/y) following a 2.2% jump. Nonstore retailers posted a 0.3% sales decline (+5.1% y/y), the first material drop since April. Sporting goods store sales fell 0.2% (+4.8% y/y), the first down month since May. To the upside were restaurant sales by 0.8% (8.2% y/y. Growth here has been strengthening since a modest 3.0% rise during all of 2013.

In the nondiscretionary sales categories, health & personal care store sales grew 0.5% (6.1% y/y) and also moved 6.1% higher for the full year. Food & beverage store sales improved 0.3% (2.4% y/y), the same as the prior month. For the year, these sales gained a steady 2.9%.

The retail sales figures are available in Haver's USECON database. The Action Economics figures are in the AS1REPNA database.

Retail Spending (%) Dec Nov Oct Dec Y/Y 2014 2013 2012
Total Retail Sales & Food Services -0.9 0.4 0.3 3.2 4.0 4.1 5.2
  Excluding Autos -1.0 0.1 0.2 1.9 3.0 2.9 4.3
  Non-Auto Less Gasoline & Building Supplies -0.2 0.5 0.6 4.0 3.7 3.1 4.1
Retail Sales -1.1 0.4 0.2 2.6 3.8 4.2 5.1
  Motor Vehicle & Parts -0.7 1.6 0.7 8.6 8.1 9.3 9.3
 Retail Less Autos -1.3 0.1 0.0 0.9 2.6 2.9 4.1
  Gasoline Stations -6.5 -3.0 -2.2 -14.2 -2.7 -0.6 4.3
Food Service & Drinking Places Sales 0.8 0.3 1.5 8.2 5.8 2.8 6.1
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