US retail sales unexpectedly remained flat in December, signaling that consumer spending and economic growth may be entering a slower phase earlier this year.
Commerce Department data showed flat readings following a 0.6% increase in November and came in weaker than economists’ expectations of 0.4% growth.
While retail sales had previously been supported by strong consumer spending, they came amid weak consumer sentiment, a savings rate that fell to a three-year low and a slowing labor market.
Core retail sales, which most closely reflects consumer spending in GDP, fell in December and November data was also revised down. This indirectly increased the risk of a downward revision to fourth-quarter growth estimates.
The development comes at a time when the US economy has been growing strongly, with the Atlanta Federal Reserve forecasting fourth-quarter GDP growth of 4.2%, while preliminary official data is expected to be released next week.
