Washington, Feb 14: Retail spending by American consumers plunged unexpectedly during December's key holiday shopping period, suffering its largest one-month drop in almost a decade, government data showed Thursday.
While 2018 overall was a strong year and much of the decline was due to falling gasoline prices, the sudden frugality of the US consumer could weigh on estimates for GDP growth in the year's final quarter.
The auto sector was a bright spot, however.
For the month, retail spending tallied at $505.8 billion, seasonally adjusted, a 1.2 percent dip from the previous month, marking the largest month-to-month decrease since September of 2009.
Economists had instead been expecting a token increase of 0.1 percent.
The surprise retail weakness sent Wall Street into the red, with the Dow Jones tumbling 0.7 percent at the open, putting the recent rally in jeopardy.
The Commerce Department data, which had been delayed by the record five-week government shutdown, was held down by nose-diving sales at gasoline stations, where fuel prices have fallen sharply in recent months.
But consumers also held off spending at online retailers, bars and restaurants and department stores as well as at furniture and clothing outlets.
The level put still sales up 2.3 percent above December 2017 but followed a downward revision for November.
December also saw Wall Street rout and economists say tumbling stock prices can make consumers wary of spending freely.
With cheap fuel, auto sales were unscathed: sales at motor vehicle and parts dealers were up one percent over November.
But excluding the volatile auto sector, sales were down an even weaker 1.4 percent over November.
