WASHINGTON (AP) - U.S. retail sales stumbled last month in a sign consumers remained frugal even as gas prices declined and hiring picked up.
WASHINGTON (AP) — U.S. retail sales stumbled last month in a sign consumers remained frugal even as gas prices declined and hiring picked up.
The Commerce Department said Wednesday that retail sales fell 0.9 percent in December, the largest decline since January. Gas station sales retreated sharply due to lower prices, but sales in most other categories also fell.
Excluding the volatile categories of gas, autos, building materials and restaurants, sales dropped 0.4 percent after rising 0.6 percent in November. Online and mail-order sales fell 0.3 percent, the most since April.
The figures suggest that stagnant wages are still weighing on many Americans. Average hourly pay slipped in December, the government said last week, and rose just 1.7 percent last year. That's only slightly ahead of the 1.3 percent inflation rate.
Retail sales figures for October and December were also revised lower, which could deal a blow to growth in the final three months of the year. Many economists had forecast that strong consumer spending would push growth in the fourth quarter above a 3 percent annual rate.
General merchandise stores, a category that includes department chains as well as big-box retailers such as Wal-Mart, said that sales fell 0.9 percent, the most in four years. Sellers of electronics, building materials and garden supplies, clothes and sporting goods all reported lower sales.
Restaurants were a rare bright spot with a 0.8 percent increase. Sales also rose at furniture, grocery and health products stores.
Retail sales rose just 4 percent for all of 2014, the weakest showing since 2009 when the recession ended.
The disappointing sales figures come despite lower gas prices, which have freed up money for consumers to spend elsewhere.
Gasoline costs have followed oil prices steadily lower since last summer and now stand at an average of $2.12 a gallon nationwide, according to AAA. That is near the lowest level in more than five years and down from $2.58 just a month ago. AAA estimates that Americans spent $14 billion less on gas in 2014 than the previous year.
Some of those savings have gone toward purchasing new cars. Auto sales jumped 6 percent in 2014 to 16.5 million, according to Autodata. That was the biggest year for the industry since 2006.
However, purchases slowed in December from the previous month. Auto dealers and auto parts stores reported a 0.7 percent sales drop last month, following a big 1.6 percent gain in November.
There are nearly 3 million more Americans earning paychecks than a year ago, which ought to bolster spending going forward. The unemployment rate has fallen to a six-year low of 5.6 percent.