December Retail Sales Disappoint
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December’s Retail sales unexpectedly fell -0.3%, after a revised +1.8% increment in November (previously +1.3%). The latest Bloomberg consensus forecast was for a rise of +0.5% with forecasts ranging from 0.0% to +1.2%. The decline was broad based and included an unexpected -0.8% change in motor vehicle sales. This data includes online sales.
Ex-autos retail sales dropped -0.2% during the month, compared to a revised reading of +1.9% in November (previously +1.2%). The latest Bloomberg consensus forecast was for an increment of +0.3%.
This data indicates that a recovery in retail sales will be choppy over the months ahead, with the labor market remaining as a significant headwind. This data combined with a modest jump in initial employment claims are leading equity markets lower in pre-market trading. This data should not have any significant impact to 4Q09 GDP expectations, which I believe will come in around 4.0%.
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