December Retail Sales Fall Less Than Expected

Retail sales decreased 0.1% in December to $295.1 billion, following a revised 3.0% decline in November, the Commerce Department reported Tuesday.

Nearly all trucking operations depend on the health of retail sales because such sales involve almost every type of cargo. Consumer spending accounts for two-thirds of all economic activity.

The 0.1% decline was much less than the 1.3% drop expected by analysts, Bloomberg said. Excluding the automobile sector, sales also fell 0.1% in December after falling 0.2% the previous month.

For the year, retail sales increased only 3.4%, the worst performance since a 0.6% rise in 1991. In 2000, retail sales rose 7.6 percent, Bloomberg said.

The overall decline in retail sales stemmed in large part from a 4.2% drop in sales at gasoline stations, reflecting lower prices at the pump, the Associated Press said.

Also, sales of vehicles and parts fell 0.1%, while sales of building materials dropped 1.9%. Sales of sporting goods and hobby, book and music outlets also decreased last month.

However, several other important areas made gains.

Sales at general merchandise stores, which include department stores, rose 0.5%. Food and beverage stores saw a 0.1% rise and restaurants sales rose 1.8%.

Despite the sales decline, analysts told Bloomberg it appears that consumers are spending enough to keep the recession from getting any worse at this point.

The Federal Reserve cut interest rates a total of 11 times in 2001 to help spur economic activity. Currently at 1.75%, the rate is the lowest in four decades, but the Fed could decide to lower rates again when it meets at the end of this month to further encourage economic activity.

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