US retail sales report largest decline in 12 months as recession nears

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US retail sales report largest decline in 12 months as recession nears

On Wednesday, data from the US Commerce Department had unveiled that US retail sales nosedived in December, falling by the most in more than a year, as a contemptuous decline in motor vehicles’ sales alongside a wide array of goods ranging from household equipment to basic goods such foods and medicines, had weighed heavily, sending consumer spending alongside the economy on a weaker footing.

On top of that, other data released earlier in the day had unfurled that US factory activities had logged the largest drop in nearly two years last month, as producer prices index also had toppled. If truth is to be spoken, an overall weakening in US economy ahead of a likely recession as forecasted by a number of heavyweight US lenders, would likely to prompt the US Fed to sway away from its hawkish rate-hike path.

US retail sales post largest drop in a year

According to US Commerce Department data released earlier in the day, US retail sales were slumped by 1.1 per cent in December, marking off the largest downswing since December 2021, while revised November retail sales data had unenveloped a decline of 1.0 per cent compared to a drop of 0.6 per cent revealed initially.

Besides, US core retail sales dipped by 0.7 per cent, while factory output pummelled by as much as 1.3 per cent last month. Meanwhile, addressing that common US households are scaling back spending amid a growing uncertainty looming over the US economy, a chief economist at LPL Financial in Charlotte, North Carolina, Jeffrey Roach said, “Consumers are likely retrenching…The trajectory for the economy is weakening and recession risks are rising for 2023.