January 16, 2008

Retail sales unexpectedly declined in December

WASHINGTON (Reuters) - Sales at U.S. retailers fell 0.4 percent in December and were less vigorous in November than previously thought, according to a government report on Tuesday that implied costlier energy and slumping housing prices were taking a toll on consumers.

Retail sales for all of 2007 posted their smallest gain in five years.

Excluding autos, the Commerce Department said December sales still were down 0.4 percent. Wall Street economists surveyed by Reuters had forecast that overall sales and sales excluding automobiles would be unchanged in December.

The department revised down November's sales gains to show a 1 percent rise rather than the 1.2 percent gain it reported a month ago.

For the full year 2007, department officials said retail sales were up 4.2 percent, a significantly softer gain than the 5.9 percent increase posted for 2006 and the weakest annual gain since a 2.4 percent rise in 2002.

Consumers have been a mainstay of the economy over the past year, continuing to spend despite rising gasoline and other costs, so the fresh signs of a pullback by shoppers are likely to fuel fears of recession.

Sales in department stores fell 0.4 percent in December following a 0.5 percent gain in November.

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