U.S. Retail Sales Weaken At Yearend But 2009 Improved

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.