US retail sales fall for 2nd straight month in December

U.S. shoppers spent less than economists expected in December, with overall retail sales falling for a second month in a row.

Retail and food services sales fell 1.1%, according to U.S. Census Bureau data released Jan. 18. Economists expected that figure to fall 0.8%, according to a consensus estimate compiled by Econoday.

Retail sales

U.S. retail and food services sales came in at $677.1 billion in December, according to the seasonally adjusted preliminary estimate from the Census Bureau. The decline comes after November sales fell by a revised 1%, a bigger drop than the negative 0.6% originally reported.

Sales at furniture and home furnishing stores dropped 2.5%, the biggest monthly decline in all retail categories excluding gas stations. Monthly sales at motor vehicle and parts dealers declined 1.2%. Sales at electronics and appliance stores fell 5.6% from a year ago, the biggest annual decline.

The only monthly sales increase in December was the 0.3% growth in building material and garden equipment and supplies dealers.

The sales figures are not adjusted for inflation, which continued to cool in December. The consumer price index fell by 0.3% month over month in December on a non-seasonally adjusted basis and rose 6.5% year over year.

Default risk

As of Jan. 17, the median probability of default score for all publicly traded U.S. retailers fell to 3.3% from 4.0% on Dec. 14.

Internet and direct marketing retailers had the highest median market signal one-year probability of default of any sector at 9.0%, down from 10.1% on Dec. 14, according to S&P Global Market Intelligence data. The score, which represents the odds of default within a year, is based mainly on the volatility of stock prices for public companies and accounts for country- and industry-related risks.

Bankruptcies

There were 18 retail bankruptcy filings in 2022, a 13-year low. There were three bankruptcy filings in December and one in January as of Jan. 17.