• Consumer spending weakens for third straight month.

• Spending declines are widespread across categories.

Total retail sales including food service & drinking establishments declined 0.7% (+2.9% y/y) during December following a 1.4% November shortfall, revised from -1.1%. October's 0.1% slip was unrevised. A 0.2% sales increase had been expected in the Action Economics Forecast Survey. Retail sales excluding motor vehicles & parts fell 1.4% (+1.1% y/y) in December after November's 1.3% drop, revised from -0.9%. October's 0.1% easing was unrevised. A 0.1% slip had been anticipated. In the retail control group, which excludes autos, gas stations, building materials & food services, retail sales fell 1.9% (+6.4% y/y) following a 1.1% decline slip and a 0.2% October dip. These declines followed three consecutive months of roughly 1.0% improvement. Retail sales excluding restaurants declined 0.3% last month (+6.3% y/y) after November's 1.1% fall.

Sales of motor vehicle & parts dealerships rose 1.9% last month (10.1% y/y) and reversed November's 1.5% drop. This compares to a 3.1% rise in unit light vehicle sales reported for December which made up November's 3.0% decline. Gasoline & service station sales improved 6.6% (-12.1% y/y) as seasonally adjusted gasoline prices (constructed by Haver Analytics) rose 8.3% m/m. As individuals stayed home due to the coronavirus outbreak, building materials & garden store sales improved 0.9% (17.0% y/y), about the same as in November.

Sales of nonstore retailers declined 5.8% (+19.2% y/y) following a 1.6% November fall. Electronics & appliance store sales weakened 4.9% (-16.6% y/y) after falling 8.3%. General merchandise store sales declined 1.2% in December (+1.1% y/y), about as they did in the prior two months. Shopping in department stores continued to weaken as sales were off 3.8% (-21.4% y/y), the fourth sharp decline in five months. Sporting goods, hobby, book & music store sales weakened 0.8% (+15.2% y/y) after two months of decline. Purchases at furniture & home furnishings stores weakened 0.6% (+3.1% y/y), off for the third straight month. Working the other way last month were apparel & accessory store sales which rebounded 2.4% (-16.0% y/y) after falling 6.1% in November.

Despite the inclination to stay home, food and beverage store sales fell 1.4% last month (+8.9% y/y) which reversed November's 1.5% increase. In another nondiscretionary category, health & personal care products sales rose 1.1% (5.8% y/y) following two months of 0.4% decline.

Shutdowns and restrictions on dining out continued to reduce restaurant and drinking establishment sales, which weakened 4.5% last month (-21.2% y/y) off for the third straight month.

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