Retail sales were unexpectedly flat in December

By Bryan Mena, CNN

Washington (CNN) — US consumers unexpectedly held their spending flat in the crucial month of December as they turned gloomier on the economy and the labor market stagnated.

Retail sales were unchanged in December from the prior month, the Commerce Department said Tuesday, down sharply from November’s 0.6% increase. That was much weaker than the 0.4% gain economists projected in a poll by data firm FactSet. The figures are adjusted for seasonal swings but not inflation.

The December reading was delayed a month because of last year’s government shutdown.

Retail sales declined across most of the categories tracked by the Commerce Department, falling the most at furniture stores (-0.9%) and at so-called miscellaneous stores (-0.9). Meanwhile, retail spending edged higher in a handful of categories, rising the most at home improvement stores (1.2%.)

A measure of retail sales that strips out volatile categories and gives a better indication of underlying demand — widely known as the control group — fell 0.1% in December, according to FactSet, well below the 0.4% advance economists had predicted.

Over the past year, hiring in the United States has slowed to a crawl, people’s feelings about the economy have crumbled and inflation has remained stubbornly elevated, yet consumers haven’t cut their spending. Still, the flat sales in December suggest Americans might be reaching their spending limits.

This story is developing and will be updated.

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