Nightmare Before Christmas: US Retail Sales Plunged In December

Nightmare Before Christmas: US Retail Sales Plunged In December

Suddenly, the American consumer looks tired. Retail sales dropped in December by the most in 10 months, key data out Friday showed. The 1.9% decline nearly matched the lowest estimate from more than five-dozen economists. Consensus expected only a slight drop. December's plunge was the largest since February which, you'll recall, was a month sandwiched between two stimulus checks (figure above). The ex-autos print was a woeful -2.3%. Consensus expected a small gain. The control group fell
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9 thoughts on “Nightmare Before Christmas: US Retail Sales Plunged In December

  1. This was the MMT prediction — the end of any fiscal stimulus, combined with the impending end of the supply-chain bullwhip, would bring on deflationary pressure early in the year.

    If you believe that, there are a lot of deals in the market right now.

  2. I’ve seen charts showing the “excess cash” in most consumers’ bank accounts is waning, while consumer credit balances are rising, suggesting the consumer is less flush. That seems a natural result of the fading of pandemic stimulus and the failure of BBB. I would guess most of the pressure is in demographics south of JPM’s clientele. That clientele, however, may still be feeling a touch of consumer fatigue – how many kitchen remodels and furniture replacements can one do in any 3 year period? SSS comps are tough for most retailers ex-dining/leisure, labor costs rising, shrink too. I worry more for retail than for banks.

  3. Confirms my anecdotal observations in the runup to Christmas: piles of stuff (made in China) and no one shopping. On the other hand, package deliveries to our building on the UWS were off the charts. Does the number include off- and online?

    1. @mfn I recall your observations from the field at the time. Nicely done.

      Online sales are accounted for, towards the bottom of the tables:

      454 Nonstore retailers …………………….………… ?8.7 10.7 (% mom & yoy)

  4. Through 2021 the market was dominated by an ‘end of the world’ scenario. Now it’s shifted to learning to live with covid, climate catastrophe and societal crisis for the long run – a new paradigm and a significant shift in consumer attitudes. Early indicators might be found in trends in car sales. Will we ever get back to pre-covid pricing and availability?

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