U.S. Retail Sales Plunged in December 2018

Retail sales in the United States suffered during December 2018, with their sharpest decline in nearly a decade. Sales fell 1.2% during what is typically expected to be the most profitable time of year for retail businesses.

With an otherwise strong economy in the United States, retailers may not have been ready for such a sharp drop in sales. Harsh winter weather may be partially to blame, and the partial U.S. government shutdown leaving many employees of the federal government without paychecks no doubt had a negative effect on spending, as well.

Those transient factors have largely resolved, so analysts believe the retail market will bounce back. Sales at gas stations fell 5.1%, largely due to falling gasoline prices. Internet sellers experienced a 3.9% decrease in sales. This is the largest drop since November 2008, though online retailers like Amazon and eBay recorded sales gains.

Department stores, which have been suffering for years, lost 3.3% of their sales because of internet competition. Big players such as Nordstrom, Kohl’s, and Macy’s all posted losses.

Talk of recession late in 2018 may also have something to do with consumer confidence and people’s willingness to spend money. All signs point to correction, as the U.S. economy maintains strength with wage growth, job gains, and steady gasoline prices.

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5 years ago