Jan/14/2015 (Reuters) - U.S. retail sales recorded their largest decline in 11 months in December as demand fell almost across the board, tempering expectations for a sharp acceleration in consumer spending in the fourth quarter.
The Commerce Department said on Wednesday retail sales fell 0.9 percent last month after a 0.4 percent increase in November.
It was the biggest decline since last January and exceeded economists' expectations for only a 0.1 percent drop and implied a slower pace of consumer spending at the end of 2014.
Still, economists saw the decline as temporary, citing a strengthening labor market and lower gasoline prices.
"This isn't the start of a collapse in activity as that doesn't fit with the strength of employment growth and consumer confidence. Retail sales will strengthen again before too long," said Paul Diggle, an economist at Capital Economics in London.
Economists at BNP Paribas in New York blamed the decline on difficulties adjusting the numbers for seasonal fluctuations in December because of volatility in holiday spending.
Other economists said consumers were saving the extra income from lower gasoline prices.
Excluding automobiles, gasoline, building materials and food services, sales fell 0.4 percent last month after a 0.6 percent rise in November.
Economists had expected the so-called core retail sales, which correspond most closely with the consumer spending component of gross domestic product, to rise 0.4 percent last month. Consumer spending accounts for more than two-thirds of U.S. economic activity. Full Story
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