U.S. retail sales in December suffered their worst decline in nine years, according to Commerce Department data released Thursday, a potential red flag for economic growth.
Advance estimates of December 2018 retail and food services sales, a major driver of the U.S. economy, fell 1.2 percent from the previous month, to $505.8 billion, according to the Census Bureau.
The drop is the steepest plunge in retails sales since August 2009, according to a Bloomberg News analysis of Commerce Department data.
Consumer spending is responsible for roughly 70 percent of U.S. growth and considered a key indicator of future economic conditions. The unexpected December plunge is the latest in a series of signs that growth is starting to slow after gradually accelerating since 2017.
In the wake of Thursday’s dismal sales data, J.P. Morgan slashed its projection for economic growth in the fourth quarter of 2018 from 2.6 percent to 2 percent of gross domestic product on an annualized basis.
Private- and public-sector forecasters expect the U.S. economy to slow slightly in 2019 as Europe and Asia face much steeper economic headwinds. Major European nations are bracing for a potential recession within months, and China has reported some of its weakest economic data in several years.
The U.S economy is currently projected to hold steady through the global turmoil, even if growth slows slightly due to global pressures. The economy added 312,000 jobs in December — far exceeding expectations — and there were roughly 1 million more job openings that month than workers seeking employment.
Jobs growth in January, which were reported at 304,000, was also well above expectations.
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US retail sales suffer steepest drop in nine years https://t.co/e513UHGUKK pic.twitter.com/AJLWPW3nQW
— The Hill (@thehill) February 14, 2019
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