Retail sales figures for December showed no growth, closing out the holiday season and the entire year on a distinctly lacklustre tone. According to data released by the Commerce Department, retail sales were flat in December compared to November, when business had increased by 0.6%. This result fell short of economists' expectations, who had anticipated a 0.4% rise.
Delayed Report Due to Government Shutdown
The report, which was originally scheduled for release earlier, was delayed by more than a month because of the 43-day government shutdown. This postponement added to the uncertainty surrounding the economic landscape at the end of 2025.
Widespread Declines Across Retail Sectors
The retail sales figures, which are not adjusted for inflation, revealed declines across many types of businesses. Furniture and home furnishing stores experienced a significant drop of 0.9%, while electronics and appliance stores saw a more modest dip of 0.4%. Clothing and accessories retailers also struggled, registering a decline of 0.7%.
Even the lone services category included in the report – restaurants – recorded a slight decrease of 0.1%. This snapshot offers only a partial view of consumer spending, as it does not encompass many services such as travel and hotel accommodations.
Concerns Over Consumer Spending Ability
The flat sales figures have raised serious questions about shoppers' ability and willingness to spend. Consumers appear to be growing increasingly cautious, worrying about a slowing job market and the ongoing uncertainty surrounding President Donald Trump's tariffs and their potential impact on prices.
This pullback in spending pace from November to December suggests that the holiday season failed to provide the traditional boost to retail activity that many businesses rely upon. The combination of economic concerns and policy uncertainties appears to be creating a challenging environment for retailers as they enter the new year.
