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Retail sales rise scant 0.1 percent in December


This news story was published on January 14, 2012.
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By Greg Robb, MarketWatch –

WASHINGTON — Sales at U.S. retailers increased 0.1 percent in December from the month before, the government said Thursday, in a report that bucked expectations of stronger sales during the holiday period.

The Commerce Department said sales rose to a seasonally adjusted $400.6 billion, an advance of 6.5 percent from the same month in 2010. Holiday sales — defined as November and December retail sales excluding autos, gasoline, food services and non-store outlets — grew 4.1 percent from last year, according to calculations by IHS Global Insight.

Ahead of the report, economists surveyed by MarketWatch had expected monthly sales to rise by 0.3 percent from November. Sales rose an upwardly revised 0.4 percent in November, compared with a 0.2 percent increase originally reported. Sales were also revised up slightly in October.

The sales data are seasonally adjusted, but they aren’t adjusted for price changes.

As often happens with data on retail sales issued immediately after the holidays, the government’s statistics didn’t bear out the conventional wisdom.

“Apparently, all those reports of a robust holiday shopping season were made by people too much into the holiday spirits, as retail sales did not surge in December,” said Joel Naroff, president of Naroff Economic Advisors Inc.

Electronics were touted as one of the strongest sectors for holiday shopping. But the Commerce Department’s data showed a 3.9 percent monthly decline at electronic stores.

Sales at online retailers, another supposed holiday hotspot, fell 0.4 percent.

Sales at the nation’s malls were lower in December. Sales at general merchandise stores fell 0.8 percent, including a 0.2 percent decrease at department stores.

Sales at clothing stores rose 0.7 percent, however.

“The holiday season may not have wrapped up quite as nicely as anticipated, particularly given the steps taken by many retailers to draw in last-minute shoppers through hefty discounts,” wrote Jim Baird, chief investment strategist for Plante Moran Financial Advisors, in a research note.

In a separate report Thursday, the Labor Department said initial claims for state unemployment insurance jumped 24,000 to 399,000 in the latest week.

So-called “core” sales, which exclude autos, gasoline, and building materials, fell 0.2 percent in December. This was the one and only drop in core sales seen during 2011.

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