Updated: Apr 15, 2020
According to theNational Retail Federationand recently released Commerce Department Statistics, holiday retail sales grew 2.9%. However, in an apparent contradiction to consumer spending trends, although the year-over-year growth rate for December was 2.3%, monthly retail sales in December saw the sharpest sales decline since 2009 with seasonally adjusted sales from November to December down 1.5%. This comes off of the heels of year-over-year growth rates for July and August of 6.6% and 6.3% respectively, making it appear that consumer exuberance reached its peak over the summer of 2018.
Estimates show that roughly 68% of retail sales occur the first 8 months of the year with the remaining 32% driving through the holiday season. With much of retail being dependent of strong holiday sales, and while sales drop-offs are common throughout the year, what is not common is for drop-offs to occur in December. There is a chance that the data could be revised in the coming months, but according to NRF Chief Economist Jack Kleinhenz, "The combination of financial market volatility, the government shutdown and tensions created a trifecta of anxiety and uncertainty impacting spending and might also have misaligned the seasonal adjustment factors used in reporting data."
However, if the data is correct and the December drop-off translates into a more enduring trend with year-over-year growth rates declining in 2019, as consumers cut back, panic mode could strike.