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Economy in Brief
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by Tom Moeller February 14, 2019
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.
| Retail Spending (% chg) | Dec | Nov | Oct | Dec Y/Y | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|
| Total Retail Sales & Food Services | -1.2 | 0.1 | 1.0 | 2.3 | 5.0 | 4.3 | 3.1 |
| Excluding Autos | -1.8 | -0.0 | 0.8 | 2.0 | 5.5 | 4.3 | 2.7 |
| Retail Sales | -1.3 | 0.2 | 1.1 | 2.1 | 4.9 | 4.5 | 2.8 |
| Motor Vehicle & Parts | 1.0 | 0.7 | 1.6 | 3.4 | 3.0 | 4.3 | 4.6 |
| Retail Less Autos | -2.0 | 0.1 | 0.9 | 1.6 | 5.4 | 4.5 | 2.2 |
| Gasoline Stations | -5.1 | -4.4 | 4.2 | -0.2 | 13.1 | 8.8 | -5.7 |
| Food Service & Drinking Places Sales | -0.7 | -0.7 | 0.2 | 4.0 | 5.9 | 2.7 | 5.6 |
