December Retail Sales: Solid Growth

By at 16 January, 2020, 2:38 pm

by Raymond J. Keating-

The U.S. Census Bureau reported that retail and food services sales for December 2019 grew by 0.3 percent compared to a month earlier. That was in line with expectations.

Looking at further breakdowns, when excluding motor vehicle and parts – which declined by 1.3 percent in December – sales increased by a rather robust 0.7 percent.

Other than autos, the only other major area that was negative in the December data was department stores, where sales declined by 0.8 percent – pointing to the ongoing challenges that department stores face in a dramatically changing retail setting. At the same time, nonstore retail sales – including internet sales – grew by 0.2 percent in December-vs.-November, but were up by 19.2 percent compared to a year earlier.

In addition, total sales growth for November was revised up from 0.2 percent growth to 0.3 percent growth. And as noted in the following chart, sales growth has been strong in nine of the last ten months.

Source: Federal Reserve Bank of St. Louis, FRED

Compared to a year earlier, from December 2018 to December 2019, total retail and food services sales were up by 5.8 percent; and ex-autos by 6.3 percent.

So, the consumer has been the primary source of economic growth over the past year. But more is needed to sustain and boost consumer and overall growth, which means that the U.S. needs to reverse the recent downturn in private investment and trade as reflected in the last two quarters (the second and third) of GDP data.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.


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