Retail sales fell 1.2% in December at worst in nine years

Bloomberg News / Landov

The holiday season turned out to be a bust, according to the Government's long-delayed report on December sales.

Figures: Sales at US dealerships fizzled in December and posted the biggest decline in nine years, according to a long delayed government report.

The retail sales fell 1[ads1].2% in December, the US tax office said on Thursday. It's the biggest downturn since September 2009, a few months after the end of the big recession.

Economists asked for MarketWatch expected sales to be flat.

What happened: Sales fell in every retail category except car dealers and home centers. Auto sales increased by 1% and home-center sales increased by 0.3%.

Sales fell 5.1% at gas stations, but it was not unexpected. Petrol prices have been falling since last year.

What was surprising was a 3.9% reported decline in sales on internet sellers. It will mark the sharpest fall since November 2008 – the middle of the last recession.

Of all industry accounts, the online stores led by Amazon

AMZN, + 0.12%

and eBay

EBAY, + 0.19%

reaped great gains.

Less surprisingly, sales turned 3.3% with warehouses that for many years lost ground to mainly Internet-based competitors. Traditional brick and mortar chains like Macy's

M, + 1.82%

Kohl and Nordstrom posted disappointing sales in December.

Sales also fell on bars, restaurants, clothing stores, merchants, home stores, pharmacies and outlets selling hobby articles such as books and sports items.

Big picture: The sales decline in December is likely to weigh on the government's official scorecard for the economy known as gross domestic product. Economists had calculated GDP to fall to 2.7% in the last three months of the year, but now the estimate could be taken even further.

What does this mean for the economy in 2019?

Hard to say. The stock market fueled in December and talked about the recession quickly became all the rage and it may have hurt sales.

Meanwhile, the companies continued to employ a strong clip in January. As long as the labor market remains healthy, the economy should avoid a recession.

Market reaction: Futures for the Dow Jones Industrial Average

DJIA, + 0.46%

and S & P 500

SPX, + 0.30%

became lower by both the weak retail report and surprising increase in new unemployed claims.

The 10-year tax return

TMUBMUSD10Y, -2.09%

fell 5 basis points to 2.65% after data release, and the US dollar

DXY, -0.20%

also fluctuated lower.

What they say : "These data are so willing that we have to expect heavy upward revisions, but if they stand, they are very unlikely to be representative of developments over the next few months. enjoying tax deductions or falling gas prices, but there is no reason to expect a transition, says Ian Shepherdson, chief economist at Pantheon Macroeconomics.

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