Retail sales take a fall in December

By Julianne Pepitone, staff reporter


NEW YORK (CNNMoney.com) -- Retail sales fell in December, the government reported Thursday, putting a damper on hopes that the holiday shopping season would boost figures.

The Commerce Department said total retail sales fell 0.3% to $353 billion last month, compared with November's upwardly revised 1.8% jump. Economists surveyed by Briefing.com had anticipated that December sales would grow 0.5%.

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Consumer spending accounts for two-thirds of U.S. economic activity, and related reports such as retail sales are closely watched to determine whether a recovery is underway.

Sales excluding autos and auto parts fell by 0.2% from November. Analysts expected sales ex-autos to jump 0.3%.

The December might have been even lower without a stronger-than-expected holiday shopping season. A separate Thursday report from the National Retail Foundation said year-end holiday sales rose unexpectedly by 1.1% to $446.8 billion.

Given that the economy was so weak 12 months ago, the year-to-year increase was strong. December 2009 retail sales jumped 5.4% compared to the same month in 2008.

"[It's not] clear how much of this reflects a catch-up from the fantastically depressed post-Lehman period ... and how much represents a sustainable, if very modest, upturn," said Ian Shepherdson, economist at High-Frequency Economics, in a research note. "We suspect more of the latter."

The December data are not enough "to reach a definitive verdict" on the holiday sales season, Shepherdson said. The January report will be "hugely important" as well because it reflects holiday gift card spending and post-holiday sales.

Total sales for 2009 retreated 6.2% from 2008. To top of page

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