Warmer Weather and Soft Housing Market Lead to Subdued Holiday Gains

The National Retail Federation forecast called for 5.0 percent growth.

According to the National Retail Federation (NRF), retail industry sales for December (which exclude automobiles, gas stations, and restaurants) rose 3.9 percent unadjusted over last year and increased 0.4 percent seasonally adjusted from November. November industry sales were revised down from 6.3 percent unadjusted to 5.1 percent unadjusted.

December retail sales released today by the U.S. Commerce Department show that total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) rose 0.9 percent seasonally adjusted from November and increased 3.6 percent unadjusted year-over-year.

"Unseasonably warmer weather and the slower housing market had a clear impact on consumer spending," said NRF Chief Economist Rosalind Wells. "NRF expects these subdued gains to continue into the first half of 2007."

Holiday purchases of high-end electronics such as video game systems and plasma televisions helped December sales at electronics and appliances stores rise an impressive 13.7 percent unadjusted from December 2005 and 3.0 percent seasonally adjusted from November.

The unseasonably warmer winter didn't have as much of an impact on apparel sales as expected. Sales in the clothing and clothing accessories category increased 3.0 percent unadjusted year-over-year and 0.6 percent adjusted month-to-month. However, the sluggish housing market did impact building material and garden equipment sales which decreased 4.3 percent unadjusted from last December and were also down 1.1 percent from November.

Additionally, strong year-over-year gains were seen at health and personal care stores as sales rose 8.6 percent unadjusted year-over-year and 1.2 percent from November.

NRF will release its 2007 economic forecast on Tuesday, January 16, 2007 during its 96th Annual Convention and EXPO in New York City.

The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry's key trading partners of retail goods and services.