According to the Commerce Department, the newly released late economic data on retail sales in the U.S. showed a significant decrease in December 2018. Instead of increasing by 0.2% as predicted, overall sales unexpectedly declined by 1.2%. Eleven of the thirteen largest retail categories experienced a decline of 3.9%. Amongst various specified samples of industries all showing declines in sales, the auto industry was one of the few that did experience an increase of 1%. Along with these statistics, the Commerce Department also stated that the annual growth rate of retail sales dipped to 2.3% in December, coming down from 4.1% in the month prior.
This is most likely due in part to the lengthy government shutdown that began in the latter portion of December. This drop in overall sales could also be an early indicator of the U.S. economy finally slowing down from previous periods’ successes. While this is not a huge cause for concern at the moment given the (hopefully) temporary effects of the shutdown, it’s definitely something to pay attention to in the near future.
3 comments:
I agree that the cause in the decrease of retail sales is due to the government shutdown. There is probably a lot of uncertainty about the future of the economy, especially for the government officials who were not receiving their pay during the shutdown. This most certainly has begun to affect their spending and saving habits, as well as others, causing them to focus more on saving money for a period of time before they feel comfortable spending on items that are not a necessity.
Madison,
Your article and synopsis definitely outlines a possible reason for slowdown that could spread into the rest of the economy. It seems that lately many consumers seem to be putting their funds towards experiences rather than material items - which could be a reason for this slowdown. I am curious about how the government shutdown has implicated these numbers - when many people spent through all of their savings in order to make ends meet, it does not entirely surprise me that these numbers were down.
Madison -
With regards to what Bridget and Hilary said, do you think that consumers have reached a point where they are not really worried on consumption, but want to focus more on savings and investments? To elaborate more clearly, the US has had strong, significant growth over these last few years. Obviously, people are consuming more as they are earning more, but do you think the MPC, in aggregate, is decreasing because the individual wants to consume more, have simply reached a peak? Are people done spending on material items, and are now focused on putting more away? I guess this could relate directly to diminishing marginal utility. This is just a different stance and thought. Please, let me know what your thoughts are on this.
Post a Comment