Retail Sales Continued To Fall In December As Shoppers Battled Inflation

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US retail sales decreased by 1.1% in December as inflation remained high, according to data released on Wednesday by the Commerce Department. Sales decreased in almost every category (except grocery, sporting products, and building materials), making it the biggest monthly drop since December 2021.

Refinitiv reports that economists had predicted a 0.8% monthly decline in sales. The November figure was decreased to -1%. Overall, the final data on retail sales for 2022 reveals a subdued conclusion to a holiday season that extended even later into October than the traditional late November and December. Additionally, there is a marked slowdown in the increase of wholesale prices; in December, the Producer Price Index, which was evaluated by the Bureau of Labor Statistics and issued on Wednesday, was 6.2%. According to a survey released on Wednesday by the National Retail Federation, retail sales over the November and December holiday season increased 5.3% from 2021 to $936.3 billion. The Christmas total falls short of the trade association's projections of a 6% to 8% holiday sales increase and is not adjusted for inflation and excludes sales at auto dealerships, gas stations, and restaurants.

In a statement, Jack Kleinhenz, the chief economist of the NRF, said, "We knew it could be touch-and-go for final holiday sales given early shopping in October that likely pulled some sales forward plus price pressures and cold, stormy weather." “The pace of spending was choppy, and consumers may have pulled back more than we had hoped, but these numbers show that they navigated a challenging, inflation-driven environment reasonably well. The bottom line is that consumers are still engaged and shopping despite everything happening around them.”