Consumer Spent Less at Retail This Holiday Season
Washington, DC, January 18, 2023--U.S. consumers cut back on retail spending at the height of the holiday season as consumers spent less on vehicles, in popular gift categories and furniture, reports The Wall Street Journal (WSJ).
Quoting the Commerce Department, the news outlet states that "retail sales, a measure of purchases at stores, restaurants and online, declined a seasonally adjusted 1.1% in December from the prior month. That was the biggest monthly decline of 2022 and marked the second consecutive month of decline. November’s retail sales were revised lower to a 1% drop."
The data follows signs that "consumer demand is cooling in the face of high inflation and rising borrowing costs," according to WSJ. "From a year earlier, overall retail sales advanced 6%, a slightly smaller increase than the rate of inflation.
"Unlike many government reports, retail sales aren’t adjusted for inflation and can reflect price differences in addition to purchase totals."
The holiday season saw heavy discounting due to excess inventories, and consumers largely shopped sales racks in an effort to make their dollars go further, WSJ reports.
With the consumer-price index declining in December, consumer confidence improved in early January, though WSJ notes that consumer sentiment "remains subdued by historical comparison." Similarly, "Annual inflation was 6.5% in December, a still-elevated rate but slower than June’s 9.1%, the highest year-over-year reading in 2022."