The Census Bureau said that retail sales rose 0.2 percent in December, somewhat slower than the revised 0.4 percent pace observed in November. Retail spending increased 4.1 percent in 2013. While this suggests modest growth overall for consumer purchases, it also means that retail sales growth has decelerated from the rates observed in the prior three years, down from the year-over-year rates of 6.7 percent, 6.2 percent, and 5.2 percent in 2010, 2011, and 2012, respectively.
Sales of motor vehicles and parts were one of the larger drags to retail sales growth in December, down 1.8 percent. Still, automobile sales were up nearly 1 percent in the fourth quarter and 6 percent for the year, and they continue to be a bright spot in the overall economy.
Excluding autos from the analysis, retail sales would have risen 0.7 percent in December, up from 0.1 percent in November. This indicates a pickup in spending in the broader market – definitely a good sign. Indeed, the year-over-year rate for non-auto retail sales has accelerated from 2.7 percent in October to 3.7 percent in December. This broader category rose 1.2 percent in the fourth quarter.
Segments with higher retail spending in December included food and beverage stores (up 2.0 percent), clothing and accessories retailers (up 1.8 percent), gasoline stations (up 1.6 percent), nonstore retailers (up 1.4 percent), and health and personal care stores (up 0.6 percent), and food services and drinking places (up 0.5 percent).
In 2013, the fastest growth in retail sales was observed in the following: nonstore retailers (up 9.9 percent), motor vehicle and parts dealers (up 5.9 percent), clothing and accessory stores (up 5.2 percent), sporting goods and hobby stores (up 4.8 percent), health and personal care stores (up 4.7 percent), food services and drinking places (up 4.6 percent), furniture and home furnishings retailers (up 4.5 percent), and food and beverage stores (up 4.2 percent).
Chad Moutray is the chief economist, National Association of Manufacturers.