|Month over Month||0.1%||-0.2%||0.1%|
|Year over Year||0.1%||-2.3%||-2.0%|
Retail sales closed out a miserable year on a suitably downbeat note. A 0.2 percent monthly fall was enough to more than reverse November's unrevised and minimal gain although favourable calendar effects meant that unadjusted annual growth actually moved back into positive territory.
Both food and non-food sales were down 0.2 percent from mid-quarter and total purchases for the fourth quarter as a whole dipped 0.1 percent versus July-September.
Last year was the fourth in a row to see a decline in retail sales (1.2 percent). True, the rate of fall was almost half that of 2013 (2.1 percent) but purchases only managed monthly rises in April and November. Consumer confidence picked up well in January (February update later this morning) but consumer caution is likely to remain high with unemployment close to record levels. In any event it looks as if the consumer sector provided little help to real GDP growth last quarter.
Retail sales measure the total receipts at stores that sell durable and nondurable goods. The monthly change in the headline figure, which is reported in volume terms, is only disaggregated into food and non-food categories.
With consumer spending a large part of the economy, market players continually monitor spending patterns. Retail sales are a measure of consumer well-being. The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.
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