Keep in mind November and December are prime holiday consumer spending months. With inflation being high it would be natural for sales numbers to be up because of the higher prices of goods and services. This is a double whammy.
Retail sales, a measure of purchases at stores, restaurants and online, declined a seasonally adjusted 1.1% in December from the prior month, the Commerce Department said Wednesday. That was the biggest monthly decline of 2022 and marked the second consecutive month of decline. November’s retail sales were revised lower to a 1% drop.
Sales declined in a number of gift-giving categories in December, including electronics, clothing, at department stores and online. Dining out at bars and restaurants dropped 0.9% on the month. Sales of furniture and vehicles, which are sensitive to higher borrowing costs, both fell sharply.
Wednesday’s data follows signs that consumer demand is cooling in the face of high inflation and rising borrowing costs. Some retailers have said the recently completed holiday shopping season turned out to be weaker than expected. Macy’s Inc. warned of softer sales, and Lululemon Athletica Inc. said its profit margins were squeezed as shoppers bought more items on sale. Broadly, discounting became more commonplace.U.S. Retail Sales Fell 1.1% in December – WSJ