According to Bloomberg, the broad plummet in retail sales at the end of the holiday shopping season likely resulted from a mix of crosscurrents. Plunging gasoline prices failed to boost discretionary spending amid the government shutdown and stock market turmoil. Consumers appear to have increased spending on just autos and building materials, while cutting on everything else.
Excluding automobiles and gasoline, retail sales slumped 1.4 percent, the biggest drop since March 2009, after a 0.5 percent advance the previous month. Sales in the “control group” subset, which some analysts use to gauge underlying consumer demand, also missed estimates with a 1.7 percent decline, the biggest drop since the Sept. 11, 2001, terror attacks. That followed a 1 percent advance the prior month. The measure excludes food services, car dealers, building-materials stores and gasoline stations.
While the steep drop follows other data pointing to slower growth, it’s at odds with figures showing a healthy job market and steady wage gains. The slump also may prove temporary as stocks have regained ground following the biggest December plunge since the Great Depression, and the government shutdown ended in late January. All but two of 13 major retail categories showed a decline, with non-store retailers -- which includes online stores -- falling 3.9 percent, the most since November 2008. The broad-based weakening reflected lower sales from clothing stores to and gasoline stations. Auto dealers and building materials stores were the only sectors to record increases.
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