U.S. Retail Sales Tumble 0.9% In December Amid Lower Gas Prices

(RTTNews) - Partly reflecting the recent drop in gasoline prices, the Commerce Department released a report on Wednesday showing that U.S. retail sales fell by much more than anticipated in the month of December.

The Commerce Department said retail sales slumped by 0.9 percent in December, while economists had expected sales to edge down by just 0.1 percent.

The report also showed that sales rose by a downwardly revised 0.4 percent in November compared to the 0.7 percent increase originally reported for the month.

Excluding a decrease in sales by motor vehicle and parts dealers, retail sales still fell by 1.0 percent in December compared to a 0.1 percent uptick in November.

The bigger than expected drop in retail sales was partly due to a substantial decrease in sales by gas stations, which plunged 6.5 percent amid lower gas prices.

However, the Commerce Department said core retail sales, which exclude autos, gasoline, and building materials, also fell by 0.4 percent in December.

The report showed a 1.6 percent drop in sales by electronic and appliance stores as well as a 1.9 percent decrease in sales by miscellaneous store retailers.

Peter Boockvar, managing director at the Lindsey Group, said, "Bottom line, the $0.38 [monthly] drop in the average gallon of gasoline and $0.65 decline from October clearly did not change consumer spending behavior for the better."

"This could be a timing thing in that consumers only saved the savings rather than spent it as the decline in gasoline prices seemed so new," he added.

The Commerce Department noted that total retail sales in the month of December were up by 3.2 percent compared to the same month a year ago. Sales were up 4.7 percent year-over-year in November.