U.S. Retail Sales Edge Down 0.1% In December

Retail sales in the U.S. saw a modest decrease in the month of December, according to a report released by the Commerce Department on Friday.

The report said retail sales edged down by 0.1 percent in December following an upwardly revised 0.4 percent increase in November.

Economists had expected sales to come in unchanged compared to the 0.2 percent uptick originally reported for the previous month.

The modest drop in retail sales was partly due to a continued decrease in sales by gas stations, which slumped by 1.1 percent in December after tumbling by 1.3 percent in November. The continued decline reflected lower gas prices.

The report also showed a steep drop in sales by miscellaneous store retailers as well as notable decreases in sales by general merchandise stores and clothing and accessories stores.

Meanwhile, the Commerce Department said sales by motor vehicle and parts dealers were unchanged in December after climbing by 0.5 percent in November.

Subsequently, excluding auto sales, retail sales still dipped by 0.1 percent in December after climbing by 0.3 percent in November. Ex-auto sales had been expected to rise by 0.2 percent.

Closely watched core retail sales, which exclude autos, gasoline, and building materials, also fell by 0.3 percent in December following a 0.5 percent increase in the previous month.

Rob Carnell, Chief International Economist at ING Commercial Banking, said "There is no single explanation for the weakness."

"Warmer than usual weather may have reduced spending on seasonal clothing, but doesn't explain why auto sales were so much at odds with other auto sales data which are very strong," he added. "Falling electronics sales are also hard to explain, as is food, miscellaneous sales, and general merchandise."

Nonetheless, the Commerce Department said total retail sales in December were up by 2.2 percent compared to the same month a year ago, reflecting an acceleration from the 1.6 percent annual growth seen in November.