December's retail sales numbers were flat, despite expectations

A U.S. Census Bureau report on retail sales, delayed due to last year’s government shutdown, offered a snapshot of what happened in December with record online holiday spending.

While economists had, for the most part, expected some growth in retail sales — around 0.4% over November — the actual number for December was 0%. In other words, retail sales were virtually unchanged. 

Katie Thomas, lead of the Kearney Consumer Institute, said maybe expectations for December, based on past behavior and spending among high income consumers, were just a little too high this time.

“What you see here is just a little bit of acknowledgement across the board, regardless of income, that people are making thoughtful purchases,” Thomas said. “So, they were still spending, but they weren’t overspending.”

Uncertainty about jobs, tariffs, healthcare costs, and government shutdowns could have all taken a toll on spending too, said Olivia Johnson, associate professor of retailing and consumer science at the University of Houston.

“We cannot negate the social and cultural and political turmoil that we’ve been seeing that ultimately impacts consumers,” she said.

Or maybe, with retailers offering deals earlier and earlier, consumers looking to save some money might have already finished their holiday shopping before December even started, said Arun Sundaram, senior vice president of equity research at CFRA Research.

“November was a … stronger than expected month,” Sundaram said. “Retail sales were up 0.6% from October to November, and so that sort of explained why maybe we saw some flat growth in December.”

Retail sales data can be volatile, Sundaram said, so he’s not worried about any one month.

But he will be watching as more retailers report their earnings over the next few days and weeks — in particular, looking at same-store sales, which give the clearest picture of how a retailer performed.