Retail sales have dropped for the month of December. This is the worst drop since September 2009.
The markets were turning bullish with fresh optimism for a conclusive talk on the trade deal between China and the U.S. with investors looking forward to positive news from the global trade talks.
But weak retail sales have turned down the optimism in the market. Data shows that economic activity in the country is slowing down in the latter half of 2018.
On Thursday, reports from the Commerce Department have stated that the retail sales have gone down by 1.2 percent. This level was last found in September 2009, just when the country was recovering from its recession.
November retail sales were positive with 0.1 percent. However, November data at 0.1 percent was much below the expected 0.2 percent growth.
The release of the report for the month of December was delayed by the partial government shutdown which lasted for 35 days and came to a close on Jan 25. The January retail sales report which is scheduled to be published on Friday will also be delayed.
Consumer spending has been most affected and is one of the chief causes for the drop in December retail sales. This accounts for almost two-thirds of the country’s economy. It saw an increase of 3.5 percent for the third quarter, July to September.
Furniture sales and clothing has also seen a drop in sales. Service stations have seen the biggest decline since February 2016.
Auto dealership sales have gone down by 1 percent in December. It saw an increase of 0.7 percent in the month of November.
GDP estimate for the last quarter was at 2.7 percent while the growth for the third quarter was seen at 3.4 percent.
Chief economist Jim O’Sullivan at High Frequency Economics Ltd says it is a “weaker than expected” report.