United States: Retail sales disappoint at the end of 2016
January 13, 2017
U.S. retail sales ended 2016 on a soft note, signaling potentially weaker growth in the final quarter of the year. Retail sales—not adjusted for prices—rose 0.6% from the previous month in December, which marked a mild improvement over the 0.2% increase in November but undershoot the 0.8% increase the markets had expected.
The report from the Department of Commerce showed that December’s increase was driven by another solid performance among auto dealers, who set a record in December. Yet the boost in sales was helped in part by discounts to attract buyers during the holiday season. Meanwhile, the core—or control group—retail sales, which excludes cars, gasoline and building materials, rose 0.2% in December, which came in below the previous month’s 0.3% rise.
On a year-on-year basis, retail sales picked up momentum from a 3.9% increase in November to a 4.1% expansion in December. In 2016, nominal retail sales increased 3.0%, which was stronger than the 2.3% growth in 2015. Meanwhile, online retailers posted a substantial 11.4% increase in sales in 2016, taking more market share away from traditional department stores, whose sales declined 5.6% last year.
Author: Ricardo Aceves, Senior Economist