(PatriotWise.com) – Data from the US Department of Commerce, the US Census Bureau, and the National Retail Federation revealed that US retail sales continued their ongoing decline in December 2022, dropping by 1.1 percent.
This is the largest monthly drop in retail sales since December of 2021.
In almost every category, sales were down, with the exceptions of groceries, sporting goods, and building materials.
While 1.1 percent seems like a small number, it’s more of a decline than economists predicted. Originally, they’d anticipated sales to drop by 0.8 percent.
Last year’s final retail sales report also revealed that holiday season shopping, which started toward the end of October, ended on a lackluster note.
Kayla Bruun, an economic analyst for Morning Consult, said that retail sales weakened after October 2022. During that time, consumers took advantage of a lull in inflation, as well as seasonal sales.
The Department of Commerce doesn’t adjust its retail data with inflation in mind. In June 2022, inflation hit its highest spike in the past 40 years. After that, it began to fall. According to the Bureau of Labor Statistics’ (BLS) Consumer Price Index (CPI) by December 2022, inflation was at 6.5 percent.
The latest CPI report was released in early January 2023.
Additionally, the BLS reported in its Producer Price Index that wholesale price growth had begun to cool. That rate measured 6.2 percent.
During the November and December holiday shopping season, retail sales grew 5.3 percent over the previous year to $936.3 billion, according to the National Retail Federation. The totals, which have not been adjusted for inflation and exclude sales at auto dealerships, gas stations, and restaurants, fell short of the NRF’s projections of six to eight percent holiday sales growth.
Jack Kleinhenz, NRF’s chief economist, said that given early holiday shopping in October coupled with price pressures and winter storms, they “knew it could be touch-and-go for final holiday sales.”
Kleinsenz said the pace of holiday spending was “choppy” and that buyers seem to have “pulled back” more than expected. At the same time, the holiday retail numbers show that consumers “navigated a challenging, inflation-driven environment reasonably well.”
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