U.S. Retail Sales Fall In December, Down In 2008

January 14, 2009 10:56 a.m. EST

New York, NY (AHN) - The Commerce Department reported Wednesday that U.S. retail sales fell 2.7 percent in December, much more than the 1.2 percent decline economists had expected.

The December decline pushed 2008 on a whole into negative territory with sales finishing lower by 0.1 percent year-over-year. The annual decline in 2008 is the first on record for the Commerce Department.

Results for the fourth quarter were weak, down 2.1 percent as a decline was posted in each month of the quarter. Sales are now down sixth consecutive months, the longest streak since 1992.

In a change of fortunes, retail sales in December were actually worse after excluding auto sales, down 3.1 percent. In previous months overall sales were much better when excluding the autos.

The Commerce Department's report showed sales declines in eleven of the 13 major categories it tracks.

The two categories bucking the trend, miscellaneous retailers along with health and personal care; both produced small sales gains for the month.

Gasoline sales led the December decline, down 16 percent. The result is further evidence of deteriorating demand for the product.

The continued weakness in the housing market was also evident by the 2.9 percent decline in sales of building materials and supplies.

With the unemployment rate hitting 7.2 percent in December and additional layoffs being announce since then, retail sales are expected to remain sluggish over the coming months.