Retail sales plummeted by the most in nine years in December.
The Commerce Department said Thursday that retail sales sank 1.2% to $505.8 billion, marking the biggest drop since 2009, as receipts fell in nearly every major category. The results were well below economist expectations for a 0.1% increase.
"In one line: Unbelievable," Shepherdson at Pantheon Macroeconomics said. "These numbers are astonishing, and impossible to square with the Redbook chain-store sales survey, which reported surging sales in December and a record high in the week of Christmas, on the back of the plunge in gasoline prices."
Excluding volatile categories including gasoline, cars and food, core retail sales dropped 1.7% in December. In November, they had risen 1%.
"The decline in gasoline spending was not a surprise, but the rest of the weakness in retail sales was worse than expected," said Adam Ozimek, an economist at Moody’s. "We are likely seeing some combination of wealth effects from falling stock prices and a the effects of a bad winter."