Investing.com - U.S. retail sales fell for the first time in ten months in December, as American consumers worried over the government shutdown.
The U.S. Commerce Department said that U.S. retail sales tumbled 1.2%, compared to forecasts for a gain of 0.1%.
Core retail sales - which exclude automobiles, gasoline, building materials and food services and more closely corresponds to the U.S. consumer spending component of gross domestic product - declined 1.8%.
Economists had forecast core growth to post a flat reading.
The Commerce Department released this data, accounting for about 70% of the American economy, later than normal due to delay from the five-week long partial government shutdown.
The January gauge of consumer sentiment from the University of Michigan hit its lowest level in two years as pessimism over the government shutdown and the uncertainty over the economic outlook made consumers cautious.
Recent business and manufacturing surveys have pointed to a slowdown in growth while some retailers warned about weak holiday sales.
The National Retail Federation (NRF) warned at the beginning of February that retail sales growth was expected to slow in 2019 amid a wider cooling off of the global economy.
NRF president Matt Shay warned that headwinds from another pending government shutdown, currently slated for Feb. 15, and ongoing trade disputes could hit consumers at a time when the benefits of tax cuts were coming to an end.
“The biggest priority is to ensure that our economy continues to grow and to avoid self-inflicted wounds. It\'s time for artificial problems like trade wars and shutdowns to end, and to focus on prosperity not politics,” Shay added.
Looking ahead to January retail sales, Michael Hewson, chief market analyst at CMC Markets, warned that more signs of weakness could be on the horizon.
“Consumer confidence has already started to ebb away and that tends to prompt a tightening of belts. This could be reflected in the latest January retail sales numbers, which generally see a dip after Christmas, as consumers pay off their December extravagances,” Hewson said.