Even though the number of jobs considerably increased this December, there is no sign that consumers are not interested in spending the new earned salary. Retail sales dropped while gas sales got retreated their offer. In other words, sales are not a priority this season.
The Commerce Department stated that this season’s holiday sales dropped by 0.9 percent last month after a rise of 0.6 in November. Since April, online sales also dropped by 0.3 percent. The department fears that this is the biggest decline in the past eleven months. They have not taken into consideration fluctuating industries such as auto, construction, catering or oil.
One cause of the downfall of retail sales can be the weak hourly pay. The hourly payments have also dropped last month. The inflation rate is 1.3 while the average pay has only been raised 1,7 percent.
However, American economists are optimists about the U.S economy and do not see this downfall a major catastrophe. They believe that this drop is temporary and it will not have a long term effect on the economy. Since the employment rate has grown, retail sales cannot remain at this low point for too long. A 3 percent increase is foreseen in the first quarter of the year.
On the other hand, general merchants complained that last month’s sales have never been this low in the last 4 years. Retailers like Wal-Mart or electronic departments along with clothing and building materials lost almost one percent in December. These figures were said to be the lowest since the recession ended in 2009.
A cause for these small figures can be the low gas prices. A gallon of gas has become extremely cheap, selling for about 2 dollars. This is the lowest price range in the last five years.Spending less money on gas, retailers were expecting consumers to spend their salaries at the holiday shopping season.
While merchandise store sales lost considerable percentage, restaurants and furniture gain almost one percent increase. The good news is also that most people’s concern was health products. Stores selling groceries and healthy products gained a one percent increase on sales. This came as a surprise for most analysts.
However, all retail sales had only a 4 percent increase in the entire year. Also, the stocks have bloomed in the past years. So wealthy people have additional income to spend.
Image Source:
