US Retail Sales Disappoint In December, Despite Surge In Auto Sales & Gas Costs

The all-knowing folk at BofA expect a hotter than consensus print for retail sales this morning, as seasonal distortions play a factor (there were two shifts in the December calendar relative to 2023. First, a late Thanksgiving pushed Cyber Monday into December. Second, there were four weekends in December 2024, vs. five in 2023. On balance, these factors led to a slightly more favorable seasonal factor (SF) in December 2024 than December 2023)

For once, BofA was wrong with the headline retail sales print disappointing (+0.4% MoM vs +0.6% exp). which dragged the YoY sales growth down a little to +3.9%…

Source: Bloomberg

Building Materials and Food Services saw the biggest declines MoM while Auto sales advanced 0.7% after robust gains in the prior two months, bolstered by President-elect Donald Trump’s threat to end tax credits for electric vehicles, as well as lower interest rates and greater manufacturer incentives. Receipts at gasoline service stations increased, reflecting higher prices at the pump.

On the other side of things, the Control Group – which feeds into the GDP calculation – saw a big beat, rising 0.7% MoM (vs +0.4% exp)…

Source: Bloomberg

As a reminder, retail sales data is nominal, so adjusting for inflation (admittedly very roughly) we see real retail sales rose just 1.0% YoY…

Source: Bloomberg

Overall, this data is a positive sign for the consumer still who continues to increase spending (to afford higher cost items due to inflation)