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Wednesday, June 19, 2024 | Back issues
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Report: Holiday Retail Sales Nosedived in December

A series of government reports released Wednesday and Thursday highlight a two-month drop in U.S. wholesale prices, plummeting holiday retail sales in December and low tax refunds.

WASHINGTON (CN) - A series of government reports released Wednesday and Thursday highlight a two-month drop in U.S. wholesale prices, plummeting holiday retail sales in December and low tax refunds.

After an approximately month-long delay due to the partial government shutdown, the Labor Department published reports that include statistics from January in its month-to-month analysis of price changes.

According to Thursday’s report, producer wholesale prices fell 0.1 percent from the preceding months in both December and January. Over the past 12 months, the figures show, wholesale prices rose by a small margin of 2 percent.

Producer prices account for changes in price that occur before a product or service reaches consumers.

The monthly producer price declines do not indicate that the economy is going downhill for U.S. producers and consumers of wholesale products, but signals inflation remains under control, according to an Associated Press report on Thursday.

The consumer costs increased in January for apparel, jewelry, footwear and accessories retailing, which rose 6.3 percent from December collectively. In addition, inpatient hospital care and transportation costs increased in January for some patients and passengers and products, according to the report on Wednesday.

Keeping pace with its consecutive three-month decline, the average energy cost for consumers fell 3.1 percent in January, with gasoline prices alone falling 5.5 percent from December. Energy prices fell 4.8 percent over last year’s 12-month period.

The U.S. Census Bureau on Thursday released a trade report through the Department of Commerce, but did not include figures from last month.

According to its findings, retail and food service sales in December amounted to $505.8 billion, a 1.2 percent drop from the month before. This was the sharpest month-to-month decline since 2009.

Department store giants J.C. Penney, Kohl's and Macy’s all reported low sales during this time, when department stores, overall, suffered a 3.3 percent decrease in sales.

Addressing a separate trend, it says drinking places, restaurants and clothing stores were better off than in December of 2017 when sales were about 4 percent lower.

The Census Bureau’s report showed non-store retailers such as online vendors were not spared from the plummet in sales the rest of the industry saw in December 2018. Sales for these vendors dropped 3.9 percent from November, the industry’s largest monthly drop since the Great Recession of 2008.

News of December’s unexpected retail slowdown sparked caution in investors on Thursday, causing some stock prices to waver during the day after the National Retail Federation separately announced that holiday season sales were weaker than expected.

Discounting public speculation from some investors and independent analysts, both agencies say the 35-day lapse in federal funding did not impact the quality or accuracy of the report.

The Labor Department report indicates that requests for unemployment benefits rose by 4,000 to 239,000 last week as part of a four-week average increase of 6,750 to 231,750.

Despite the rising unemployment level, the Labor Department says over 300,000 U.S. jobs were added and available in January.

The IRS was also back in action on Thursday, releasing a report on this season’s tax returns.

The average tax refund amounts during the first 12 days of the 2019 tax season have fallen for the second consecutive week, according to the IRS. The total amount of refunds issued has also dropped.

The average refund amount paid during the second week of the filing season was down 8.7 percent compared to the same time last year.

Most citizens did receive a tax cut under the “Tax Cuts and Jobs Act” signed by President Donald Trump in December 2017, and the smaller refunds reported on Thursday may have resulted from workers and employers failing to properly adjust wages withheld from their paychecks, according to an Associated Press report on Thursday.

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Categories / Business, Consumers, Government, National

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