U.S. retail sales unchanged in December from November, closing out year on a lackluster tone

Shoppers browse items for sale at an Apple store. THE CANADIAN PRESS/Sammy Kogan

American shoppers pulled back the pace of their spending in December from November, closing out the holiday shopping season and the year on a lackluster tone.

The report, issued by the U.S. Commerce Department on Tuesday, raised questions about shoppers’ ability to spend this year as they worry about a slowing job market and uncertainty around President Donald Trump’s tariffs and their impact on prices.

Retail sales were flat in December from November, when business was up 0.6 per cent, according to the Commerce Department. Economists were expecting a 0.4 per cent increase for December.

The report delayed more than a month because of the 43-day government shutdown.

Sales in October fell 0.1 per cent, rose 0.1 per cent in September, but jumped 0.6% in July and August and one per cent in June, according to the Commerce Department.

The retail sales figures, which are not adjusted for inflation, showed that many types of businesses including furniture and home furnishings stores as well as electronics and appliance retailers posted declines.

Among the few bright spots: building materials and garden stores, which had a small sales increase.

The snapshot offers only a partial look at consumer spending and doesn’t include many services, including travel and hotel lodges. But the lone services category – restaurants – registered a dip of 0.1 per cent.

Economists will be closely monitoring a slew of economic reports on jobs and prices due out later this week.

But the economy is in a confusing place.

Growth is robust: Gross domestic product — the nation’s output of goods and services — advanced from July through September at the fastest pace in two years. But the job market is lackluster: Employers have added just 28,000 jobs a month since December.

In the 2021 to 2023 hiring boom that followed COVID-19 lockdowns, by contrast, they were creating 400,000 jobs a month.

When the agency releases hiring and unemployment numbers for January on Wednesday, they are expected to show that businesses, government agencies and nonprofits added about 80,000 jobs last month — modest but up from 50,000 in December.

Analysts will also be studying consumer price report, to be released Friday. In December, consumer prices matched the 0.3 per cent increase in November. If inflation cools in the coming months, it could increase the likelihood the Federal Reserve will reduce its key interest rate later this year, economists say.

Against this backdrop, some chains like Walmart, whose everyday low prices have pulled in shoppers from rivals, are thriving but others struggle.

A growing number of retailers are closing stores as companies reorganize under bankruptcy protection or pare down their operations to focus on profitable operations.

On Monday, the operator of roughly 180 Eddie Bauer stores across the U.S. and Canada has filed for Chapter 11 bankruptcy protection, blaming declining sales and a litany of other industry headwinds.

Last month, the parent company of Saks Fifth Avenue that it was seeking bankruptcy protection, buffeted by rising competition and the massive debt it took on to buy its rival in the luxury sector, Neiman Marcus, just over a year ago. A few days later, the parent company said it was closing most of its Saks Off 5th stores.

Amazon said earlier this month that it was closing almost all of its Amazon Go and Amazon Fresh locations within days as it narrows its focus on food delivery and its grocery chain, Whole Foods Market.

Anne D’innocenzio, The Associated Press