US retail sales fell at their fastest rate in nearly a decade in December, stoking fears of a global slowdown, as shoppers watched their pennies over the vital Christmas period.
Sales plunged 1.2 per cent, their largest monthly decline since the country was trying to recover from the financial crisis in September 2009.
Meanwhile, November’s sales figures were revised down, halving the growth to 0.1 per cent.
A gloomy Thursday was perpetuated later when US jobless numbers reached their highest level in a year.
The surprising figures dampened the effect of comments from US President Donald Trump, who said trade talks are going “very well” with China.
When stripping out cars, petrol, building materials and food service, retail dropped even further, by 1.7 per cent.
The report had been delayed by the US government shutdown, which ended late last month.
Meanwhile, there is no word on when January’s report, due to be published tomorrow, will come out.
However, the shutdown also caused some, including White House economic adviser Larry Kudlow, to question the validity of the data which the Commerce Department was able to gather.
The department dismissed such claims, saying the quality of its processing and data was monitored and “response rates were at or above normal levels for this release.”
Analysts at UBS said they had expected a drop in the fourth quarter of last year as tariffs bite.
However, the bank said that the “fall in consumption is worrisome and reflects greater weakness in the household sector in the fourth quarter than we had been expecting.”
Randy Frederick, at Charles Schwab in Austin, Texas, said: “The numbers were a bit of a surprise on the downside and that is critical because this is for December and it suggests that people weren’t spending enough on holiday sales shopping.”