Consumers cut back on spending late in 2018, to the greatest degree since 2009. Total retail sales declined 1.2% (+2.3% y/y) during December following a 0.1% November uptick, revised from 0.2%. A 0.2% rise had been expected in the Action Economics Forecast Survey. A pocket of strength was in the motor vehicle sector where sales rose 1.0% (3.4% y/y) following two months of strong increase. Excluding motor vehicles and parts, retail sales fell 1.8% following a little change in November, revised from 0.2%. A 0.1% uptick had been expected.

A measure of the underlying pace of retail spending is nonauto sales growth excluding gasoline and building materials. These sales fell 1.7% (+1.9% y/y) after a 1.0% rise.

The retrenchment in retail spending was evident throughout the report. Sales of sporting goods, hobby shop, book & music stores plummeted 4.9% (-13.0% y/y) and have fallen sharply in each of the last nine months. Nonstore retail sales dropped 3.9% (+3.7% y/y) and reversed the prior month's increase. Purchases at furniture & home furnishings stores fell 1.3% (-0.2% y/y) after a 0.5% rise. Sales at electronics and appliance stores eased 0.1% (+0.7% y/y) and have been lackluster for six straight months. General merchandise store sales were off 0.9% (+2.2% y/y) after a 0.4% gain. Clothing & accessory store sales dropped 0.7% (+4.7% y/y) following a 0.4% rise.

Reflecting lower prices, gasoline service station sales declined 5.1% (-0.2% y/y), about as they did in November. To the upside, building materials & garden equipment store sales improved 0.3% (1.4% y/y) after a 1.5% decline.

Sales of nondiscretionary items also were weak last month as health & personal care product store sales decreased 2.0% (+1.6% y/y) after a 1.3% gain. Food & beverage store sales declined 0.4% (+1.4% y/y) following a 0.1% rise.

Even the inclination to dine out waned. Restaurant & drinking establishment sales declined 0.7% (+4.0% y/y), the same as in November.

The retail sales data can be found in Haver's USECON database. The Action Economics forecast is in the AS1REPNA database.