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NRF reports holiday sales gains less than anticipated

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WASHINGTON – The holiday season turned out not to have been a particularly merry one for retail sales, the National Retail Federation said on Thursday. Retail sales grew a lower-than-expected 2.9% during the two-month period, according to the NRF, which cited U.S. Commerce Department data that had been delayed by nearly a month because of the government shutdown.

“All signs during the holidays seemed to show that consumers remained confident about the economy,” NRF president and chief executive officer Matthew Shay said. “However, it appears that worries over the trade war and turmoil in the stock markets impacted consumer behavior more than we expected. There’s also a question of whether the government shutdown and resulting delay in collecting data might have made the results less reliable. It’s very disappointing that clearly avoidable actions by the government influenced consumer confidence and unnecessarily depressed December retail sales.”

The numbers, which exclude automobile dealers, gasoline stations and restaurants, fell short of NRF’s forecast last fall that holiday sales from November 1 through December 31 would grow between 4.3% and 4.8% to between $717.45 billion and $720.89 billion. Instead retail sales for the two months totaled $707.5 billion.

That total includes $146.8 billion in online and other non-store sales, which grew 11.5% over 2017. NRF had forecast that the online sector of retail would grow between 11% and 15% to between $151.6 billion and $157 billion.

November – the first half of the holiday season – grew 5.1% unadjusted year-over-year. But December was up only 0.9% year-over-year and down 1.5% seasonally adjusted from November. NRF does not count October as part of the holiday season, but the trade group notes that holiday shopping has shifted into earlier months, and October was up 5.7% year-over-year. As of December, the three-month moving average was up 0.7% over the same period a year ago.

“Today’s numbers are truly a surprise and in contradiction to the consumer spending trends we were seeing, especially after such strong October and November spending,” NRF Chief Economist Jack Kleinhenz said. “The combination of financial market volatility, the government shutdown and trade tensions created a trifecta of anxiety and uncertainty impacting spending and might also have misaligned the seasonal adjustment factors used in reporting data. This is an incomplete story and we will be in a better position to judge the reliability of the results when the government revises its 2018 data in the coming months.”

NRF’s numbers are based on data from the U.S. Census Bureau, which said Thursday that overall December sales – including auto dealers, gas stations and restaurants – were down 1.2% seasonally adjusted from November but were up 2.3% unadjusted year-over-year.

The holiday numbers come as NRF is forecasting that retail sales during 2019 will increase between 3.8% and 4.4% to more than $3.8 trillion.


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