Retail sales soften in December

Retail sales for the month of December rose nearly 5.2% year over year, to about $749 billion on an unadjusted basis, according to data provided by the U.S. Census Bureau.

Driving the news: On a seasonally adjusted basis, December retail sales grew 6% year over year but fell 1.1% month over month to about $677 billion.

• The headline number for December was affected by lower gas and auto sales, as well as a decline in home furnishings.

Why it matters: Retail sales were about $916 billion for November and December, excluding auto, gas and restaurants.

• That's below the National Retail Federation's projection that holiday sales would increase between 6% and 8% or between $943 billion and $960 billion.

Between the lines: A number of retail analysts and economists prefer year-over-year comparisons because month-over-month figures are seasonally adjusted utilizing data from the past 10 years that contain a lot of noise.

• That time period includes the depths of the pandemic.
• And while results are seasonally adjusted, they do not take into account inflation, which appears to be cooling.

Yes, but: Food services and drinking places saw a noticeable jump in sales to about $89 billion in December from nearly $79 billion a year ago, an increase of more than 12%, as consumers shift spending from objects to experiences.

Richard Collings writes the Axios Pro Retail deals newsletter. Start your free trial at AxiosPro.com.