Chart of the Week: Retail Sales Decline

Chart Retail Sales Decline

Coming into early 2019, the economic spotlight was placed on the consumer to see if the 2018 year-end market selling and other soft confidence-related releases would lead to weaker spending. One way to gauge the spending growth of consumers is through the change in retail sales which is displayed by the black line, while the gold line represents the change in retail sales excluding gas stations, building materials, and automobiles. Although it is only one data point, last week’s retail sales decline represents the largest decline since 2009. The decline is concerning given that the data represented December 2018 retail sales, where we would typically expect spending to be strong around the holidays. However, the pessimism that can be extracted from the most recent data point was not supported by numerous other retail spending related gauges around the holiday season or by the current job market and wage growth picture. It will be interesting to see if December’s decline will become a trend or if the data was skewed by one off issues that will be corrected in January.