| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Month over Month | 0.2% | -0.1% | 0.4% | 0.3% |
| Year over Year | 0.3% | 1.5% | 1.4% |
Highlights
Retail sales unexpectedly fell at year-end. A 0.1 percent monthly dip followed a slightly smaller revised 0.3 percent rise in November and was the first setback since September. Unadjusted annual growth slowed from 1.4 percent to 0.3 percent.
Volumes were a good deal weaker, declining 0.5 percent versus November to hit a 3-month low. Much of the damage was done by the food sector where sales were down 0.9 percent, their steepest drop since last February. Non-food purchases decreased 0.2 percent.
Today's update underlines the weakness of the retail sector and leaves total fourth quarter volume sales 0.2 percent below their level in the third quarter when they contracted a hefty 1.3 percent. It also means that sales have declined every quarter since the April-June period in 2022. More generally, the December data put the Italian RPI at minus 14, implying a modest undershoot by overall economic activity versus expectations. That said, with the RPI-P at exactly zero, the shortfall is only due to surprisingly soft prices.
Volumes were a good deal weaker, declining 0.5 percent versus November to hit a 3-month low. Much of the damage was done by the food sector where sales were down 0.9 percent, their steepest drop since last February. Non-food purchases decreased 0.2 percent.
Today's update underlines the weakness of the retail sector and leaves total fourth quarter volume sales 0.2 percent below their level in the third quarter when they contracted a hefty 1.3 percent. It also means that sales have declined every quarter since the April-June period in 2022. More generally, the December data put the Italian RPI at minus 14, implying a modest undershoot by overall economic activity versus expectations. That said, with the RPI-P at exactly zero, the shortfall is only due to surprisingly soft prices.
Market Consensus Before Announcement
Sales are seen rising 0.2 percent on the month after a 0.4 percent increase in November.
Definition
Retail sales measure the total receipts at stores that sell durable and nondurable goods. The headline data are expressed in nominal terms but volume statistics are also available. Autos are excluded. Only a very limited breakdown of subsector performance is available in the first report but much greater detail is provided in the following month's release. The Italian National Institute of Statistics (Istat) is the main producer of official statistics in Italy.
Description
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.
