Holiday season spending in the USA amplified lower than expected by a mere 2.9 percent to US $ 707.5 billion, said National Retail Federation, the world’s largest retail trade association.
The reason cited for such a slow rate is the chaos over trade policy.
“All signs during the holidays seemed to show that consumers remained confident about the economy. However, it appears that worries over the trade war and turmoil in the stock markets impacted consumer behavior more than we expected,” NRF President and Chief Executive Matthew Shay said.
Sales in November 2018 increased by 5.1 percent but in December 2018 sales grew by 0.9 percent and were down 1.5 percent seasonally adjusted from November 2018.
The figures go amiss of NRF’s forecast of growth between 4.3 percent and 4.8 percent, to between US $ 717.45 billion and US $ 720.89 billion.
NRF also stated that online and other non-store sales grew by 11.5 percent to US $ 146.8 billion. Previously, the trade association had forecast the online retail to grow between 11 percent and 15 percent, to between US $ 151.6 billion and US $ 157 billion.
“Today’s numbers are truly a surprise and in contradiction to the consumer spending trends we were seeing, especially after such strong October and November spending,” NRF Chief Economist Jack Kleinhenz said.
It now expects US retail sales to grow between 3.8 percent and 4.4 percent to over US $ 3.8 trillion in 2019. The overall economy is expected to gain an average of 170,000 jobs per month in 2019, down from 220,000 in 2018.
Unemployment is currently at 4 percent and will drop to 3.5 percent by the end of 2019.